Yahoo Finance SSP soars after impressive sales performance; bodes well for travel season
Investing.com - SSP Group (LON:SSPG) stock soared Wednesday after the operator of food and beverage travel concessions reported impressive sales growth in the second quarter, driven by the continued rebound in demand for leisure travel.
At 07:05 ET (11:05 GMT), SSP shares rose nearly 12% to 174.8p, bouncing after losses of around 25% year-to-date.
The group, which owns the Upper Crust baguette chain, said overall sales grew by 15% between March and June 30 compared to the same period last year, while sales in the U.S. and Canada – boosted by three acquisitions – were up 25%.
In Continental Europe, sales grew 7%, while in the U.K., earnings were up 12 per cent, which was largely down to good passenger air numbers.
“Today's trading update should provide reassurance around 2H24E performance, especially in the context of a weak YTD share price,” said analysts at Jefferies, in a note.
“M&A upside gives us further confidence in SSP's longer-term investment case - we expect an inflection in consensus EPS estimates to trigger a re-rating in due course,” the investment bank added.
“A 40% discount to the pre-COVID PE multiple does not reflect the enlarged opportunities and a higher revenue growth rate.”
Jefferies kept a ‘buy’ rating, with a 340p 12-month price target.
SSP is a market leader within its market, analysts at RBC Capital Markets said, adding travel remains one of our preferred subsectors within Retail, given an ongoing strong recovery and likely consolidation opportunities in the market.
“We think this should reassure on travel demand across the peak summer season and we see this as a positive readacross for the likes of WH Smith (LON:SMWH) and Avolta (SIX:AVOL),” RBC said, in a note.
RBC maintained SSP at ‘outperform’, with a target price of 235p.
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