Amadeus’ Q3 Sees Gradual Demand Improvement With No Signs of Travel Fatigue; Shares Discounted

Like narrow-moat peer Sabre, narrow-moat Amadeus’ third quarter demand trends showed gradual improvement, tracking in line with our forecast. We do not plan to materially change our EUR 60 valuation, leaving shares undervalued. Amadeus offers investors industry leading revenue share, margins, and liquidity profile, but at current prices we prefer Sabre shares, which trade at 8 times 2024 EV/EBITDA versus 10.5 times for Amadeus. In our view, Sabre provides investors similar demand recovery and market share trends, supported by its completed migration to the cloud by the end of 2024, which we believe will be ahead of Amadeus’ transition (the move to the cloud lowers compute costs and speeds product innovation).