SSP Group plc (LSE:SSPG), the operator of food and beverage outlets in airports and railway stations, has seen its shares fall almost 15% since the end of February as investors fret that the Middle East conflict will dent passenger volumes and hurt revenues.
UBS argues the selloff looks overdone, maintaining a 'buy' rating and a price target of 245p – implying upside of around 39% from the last close of 174p.
The bank points to forward-looking aviation capacity data showing only "modest declines" in planned growth across SSP's main markets in March and April, while capacity over the crucial summer months from May to August in Europe, the US and India is actually tracking higher than at the time of the group's most recent trading update.
The US division, which carries higher margins than the rest of the group, may be approaching an inflection point, analyst Ivar Billfalk-Kelly said, with passenger volumes growing around 2.5% in February after a flat 2025, accelerating to over 4% in the first two weeks of March.
SSP generates around 80% of its annual operating profit in the second half of its financial year, making summer trading pivotal.
One tailwind is India, where planned capacity growth in July and August is running at around 10%, partly reflecting the unusually low base following last year's Air India crash.
Overall, the analyst said: "While clearly this data needs to be approached with caution given conditions can change quickly, the group's limited direct exposure to the Middle East and the current strong forward looking capacity growth suggest the ongoing conflict may have limited impact on SSP."