Sign up United Kingdom
Proactive Investors - Run By Investors For Investors

Ladbrokes Coral and TUI slide on JP Morgan downgrade

Both firms had a good run last year but travel and gaming news is unlikely to be as supportive now, says the broker
hotel room
The hotel industry is unlikely to throw up positive surprises, especially in the USA, says JP Morgan

JP Morgan prefers catering stocks in the European leisure industry and has downgraded bookie Ladbrokes Coral Group (LON:LCL) and travel giant TUI AG (LON:TUI).

Both stocks had a good run last year but travel and gaming news is unlikely to be as supportive in the first half, says analyst Jaafar Mestari.

READ: Ladbrokes Coral and GVC Holdings in 'detailed' talks about £3.9bn merger

The hotel industry is unlikely to throw up positive surprises, especially in the USA, he added.

There the "real" RevPAR (revenue per available room)  is already 6% above its 2008 peak and is now the only region showing accelerating supply.

The broker has downgraded TUI  and Ladbrokes to 'neutral'.

READ: TUI delivers full year earnings growth on strong demand for hotels and cruises

It reckons the macro economic landscape is more supportive of stocks like Compass (LON:CPG) and SSP Group plc (LON:SSPG).

"An environment of stable wage inflation and slightly higher food inflation than in 2017 should allow organic growth rates towards the high end of the sector's historical range, and stable margins," it said.

Ladbrokes shares shed 1.46% to 183.375p, while TUI lost 0.03% to 1,577p.

View full LCL profile View Profile

Ladbrokes Coral Group PLC Timeline

Related Articles

ZoomAway Travel Inc embracing blockchain, which is set to push out middle man in hospitality and act
January 11 2018
The firm plans to begin rolling out cryptocurrency payments into its white label and registration management system (RMS) clients
Festival crowd
August 20 2018
There could be a potential uplift of in both revenue and underlying earnings if the firm manages to capture a slice of the UK's 4mln festival-goers
Oil pollution
July 02 2018
A name change might be in order if PCG pulls the trigger on two investments it is mulling

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use