Deutsche Bank sees a buying opportunity in SSP Group plc (LSE:SSPG) after the travel food-and-beverage operator failed to join the wider sector rebound.
In a note, the bank's analysts repeated a 'buy' rating on SSP, with a 262p price target, compared with a last close of 177.90p, arguing the shares offer “rerating potential” after falling behind peers and broader travel names.
Tim Barrett at Deutsche Bank said the equity market had “moved on quickly from the Iran conflict and priced in travel normalisation,” with the wider travel and leisure sector up 6.1% year-to-date and 6.3% since 27 February.
That recovery has shown up across the travel complex, DB noted, with tour operator Jet2 up 5% and airlines broadly flat for the year. SSP, however, has gone the other way.
“A notable outlier is SSPG, despite the airport/rail F&B operator being a good proxy for travel demand,” Barrett said.
The shares are down 12% year-to-date and 13% versus pre-conflict levels, leaving them lagging both sector peers and assets closely tied to the same passenger-volume recovery.
Deutsche Bank highlighted SSP's underperformance against Avolta, the market leader, whose shares have risen 4% since the end of February, and against SSP's own Indian subsidiary, Travel Food Services, which is up 8%.
The bank's analyst, Barrett, described the gap as particularly interesting
DB described the disconnect as “a buying opportunity on a key sector pick”.
