Pent-Up Demand Reflected in Leisure Shares but Not Yet in Leisure Activities

Twelve months on from when coronavirus first hit our shores, no moat-rated leisure shares have all rallied strongly to be at or above our intrinsic assessments. Ardent Leisure is up 343% to AUD 0.93 (versus our AUD 0.55 fair value estimate), Event Hospitality is up 50% to AUD 11.23 (AUD 11.20 fair value estimate) and Flight Centre is up 98% to AUD 17.63 (AUD 18.00 fair value estimate). The recovery trade has been buoyed by easing pandemic fears, the gradual vaccine rollout and an accommodative equities market.