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Accor SA AC

Morningstar Rating
€37.77 −0.08 (0.21%)
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Company Report

Accor Maintains a Leading Brand Intangible Asset in Its Core European Market

While inflation and slow economic growth present near-term demand headwinds, we expect Accor to expand share in the hotel industry over the next decade as a result of its solid loyalty membership of around 90 million and increasing exposure to the premium, luxury, and lifestyle segments, supporting its intangible brand asset advantage, the source of its narrow moat. Accor's growing room share is being driven by an increased presence in higher-end luxury/premium upscale rooms, which were 27% of its total in 2022. This higher luxury presence diversifies Accor from its core economy/midscale exposure, which more directly competes against narrow-moat Airbnb and other alternative accommodations. Overall, we see Accor posting 3% unit growth on average over the next 10 years, well above the roughly 1% long-term industry rate in its core European region (43% of total rooms in 2022).

Price vs Fair Value

AC is trading at a 9% discount.
Price
€37.85
Fair Value
€18.30
Uncertainty
Medium
1-Star Price
€65.97
5-Star Price
€15.18
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Accor’s mid-single-digit share of hotel industry rooms is set to increase, as the company controls about 10% of the rooms in the global hotel industry pipeline.

Bears

Alternative accommodations present a competitive threat, and the advancement of technology and its use by next-generation travelers increases the access and awareness of these properties.

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Trading Information

Previous Close Price
€37.85
Day Range
€37.6037.83
52-Week Range
€27.7138.21
Bid/Ask
€37.76 / €37.78
Market Cap
€9.53 Bil
Volume/Avg
205,301 / 683,995

Key Statistics

Price/Earnings (Normalized)
17.13
Price/Sales
2.16
Dividend Yield (Trailing)
1.88%
Dividend Yield (Forward)
1.88%
Total Yield
1.88%

Company Profile

Accor operates 812,425 rooms across 46 brands addressing the economy through luxury segments, as of Sept. 30, 2023. Ibis (economy scale) is the largest brand (37% of total rooms at the end of 2022), followed by midscale brands Mercure (16%) and Novotel (14%). FRHI offers additional luxury and North American exposure. After the sale of the majority of HotelInvest (owned assets) in 2018-19, the majority of total EBITDA comes from asset-light managed and franchised hotels. Europe represents 44% of rooms, Asia-Pacific 32%, Americas 12%, and India, Middle East, and Africa 12%. Premium, midscale, and economy are 86% of total rooms, while luxury and lifestyle are the remaining 14%.
Sector
Consumer Cyclical
Industry
Lodging
Stock Style Box
Mid Growth
Total Number of Employees
186,084

Competitors

Valuation

Metric
AC
MAR
HLT
Price/Earnings (Normalized)
17.1323.4730.97
Price/Book Value
2.41
Price/Sales
2.163.014.97
Price/Cash Flow
15.7522.9946.63
Price/Earnings
AC
MAR
HLT

Financial Strength

Metric
AC
MAR
HLT
Quick Ratio
1.040.390.61
Current Ratio
1.300.430.70
Interest Coverage
6.896.934.65
Quick Ratio
AC
MAR
HLT

Profitability

Metric
AC
MAR
HLT
Return on Assets (Normalized)
4.79%12.04%10.69%
Return on Equity (Normalized)
14.00%
Return on Invested Capital (Normalized)
7.15%29.44%24.15%
Return on Assets
AC
MAR
HLT
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