Dufry Earnings: Solid Sales Growth and Strong Profit Development; Shares Undervalued

We maintain our fair value estimate for narrow-moat Dufry at CHF 58 per share as the firm reported solid first-half revenue and profit development. With more solid financial health (lowest net debt since 2015), pent-up demand for travel and travel retail, and the potential for synergies with Autogrill, Dufry shares remain undervalued. Revenue for the first half was up 26.5% on a reported pro-forma basis (21% based on our full-year estimates) and 31.5% organically, exceeding 2019 levels by 3.4% on an organic basis. We maintain our estimates as the comparison base gets more challenging as the year progresses, but the resumption of travel by Chinese citizens should boost sales. July turnover trends remained positive, despite a more difficult comparison basis, up 17% versus 2022 and up 4.7% versus 2019.