SSP Group PLC's (LSE:SSPG) shares fell 2% in afternoon trading after Goldman Sachs downgraded the stock from ‘neutral’ to ‘sell’.
The Wall Street investment bank reviewed the European travel concessions sector and cited SSP’s relative underperformance over a 12-month investment horizon.
Goldman Sachs lowered its price target for Upper Crust owner SSP from 255p to 160p. Despite acknowledging SSP's attractive long-term growth potential, the bank anticipates further downside risks to earnings per share estimates for FY25/26 and limited free cash flow generation over the next three years.
The bank expressed a preference for WH Smith PLC (LSE:SMWH) ('buy' with a price target of 1,540p) over SSP within its European travel concessions coverage.
Goldman highlighted WH Smith’s exposure to similar growth themes, such as global passenger growth and potential new contract wins, particularly in North America.
WHS is seen as having stronger cash generation, a more attractive valuation, and a clearer path to potential earnings upside, including a possible positive shift in US like-for-like trends in the coming quarters.
SSP was off 3.3p at 165.3p, while WHS was up 26p at 1,182p.