Thanks to the increase in tourist bookings, tourism companies experienced a record 2023. The unstoppable desire to travel after the pandemic, experienced for the first time without any restrictions since last year, allowed these companies to achieve double-digit revaluations. Airport manager Aena revalued up to 36%; followed by travel search engine Amadeus, which rose 31%; The hotel company Meliá increased the value of its securities by 25% in 2023, while the share of the airline IAG also increased to 21%. This year has also been a good year for the Ibex 35, which gained as much as 22.8%. These values maintain good growth expectations at the beginning of 2025. “The tourism sector has been one of the most penalized sectors during the pandemic, as the activity of most companies was limited due to mobility restrictions. Following the reopening, many rose strongly due to the recovery of the labor market and consumer confidence,” explains Joaquín Robles, analyst at brokerage XTB.
The year did not start well for the Spanish draft pick, who dropped 2.2% and lost 10,000 points in the first sessions of the year.. However, four of the three tourism companies that are part of the Ibex 35 remain green. Meliá has grown by 4.1% so far this year, followed by Amadeus, which gained 1.81%, and Aena, which gained 0.64%. The discordant rating comes from IAG, which has fallen to 4.8% so far this year. “Last year the level of activity of these companies was very similar to before the pandemic, but the financial situation of the majority of companies is not the same. During the lockdown they recorded losses of millions of dollars, which left them in a difficult situation, significantly increasing their indebtedness,” says Robles.
In fact, in the second half of the year, The industry has already experienced some disruptions in forecasting some values. “There have been forecast cuts for some stocks as there is a rotation towards companies that can perform better during the slowdown in Europe, where macroeconomic data are not encouraging, which could lead to an early rate cut by BCE. “We end up overwhelming the system,” said IG Mercados analyst Diego Morín. says.
The slowdown in the economy negatively affects tourism companies and stock market performances. Joaquín Robles warns: “Entertainment is one of the most sensitive discretionary expenditures in the event of a recession. On the other hand, China’s recovery is not yet complete and is far from reaching the 154 million tourist numbers in 2019.” Airlines are experiencing capacity problems due to lack of investment in recent years. “Costs for these companies have increased due to a shortage of qualified personnel, and video calls have significantly reduced business travel,” he says.
This means that IAG, for example, cannot exceed two euros per share. “Meliá is also experiencing problems that exceed pre-pandemic levels. Amadeus and Aena have recorded larger increases in recent months, but this is because they did not increase that much initially. We expect a period of consolidation for this year. Growth is very limited and will depend on the development of the economy,” explains Joaquín Robles.
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Travel search engine Amadeus is one of the tourism-related stocks with the best prospects for analysts. “I believe it will have revenues of over 5.4 billion and profits of 1 billion in 2023. Target price could be 72.95 euros per share“says IG Mercados analyst Diego Morín.
Regarding IAG, The airline is mired in rumors of what could happen with the acquisition of TAP Portugal, as well as what will happen with its merger with Air Europa.. “It is more complicated to determine the target price here, but it can go up to 1.80 – 1.90 euros,” says Morín, who thinks Meliá has performed well after the epidemic. “We hope that demand will be robust, but I insist that we must take into account the problems that the sector may pose in the event of a recession,” Morín concludes.