We’re hosting a Black Book deep-dive presentation this Wednesday, May 11th ahead of DUFRY’s interim results to review our Best Idea Long thesis on the name. Simply put, we think that the company’s top line recovery and cash flow will continue to show/imply sequential progress when the company reports its sales update on May 19th. We’ve been right on the model thus far, but wrong on the stock. That said, at current levels, we think that the name is nearing the ‘someone will take it private’ price. Though that would be a massive catalyst to the upside, we think the better play for shareholders is to realize the upside in the model over a TAIL duration in the public markets, as we continue to see a Leisure-led travel recovery, new peak operating margins, the Hainan JV with Alibaba, and significant financial de-levering as the cash flow story accelerates materially (leverage is among the biggest push backs we get from institutions). We think sentiment on the name is troughing, institutional interest is picking up, and the interim financial results in mid-summer will show recovery in sales, margin and leverage ratios that will be a catalyst for the name to the upside – and yes, this should be just as we’re exiting Macro Quad 4. This is a dominant globally diverse business model, with a captive customer, call options in food and beverage (incl M&A) and growth in Hainan, ZERO Amazon competition, and an increasingly symbiotic relationship between airport operators and concession holders like DUFRY. We think this is the poster child for a company that will emerge from the pandemic stronger than it went in – with 5x+ upside over a TAIL duration with the stock trading at CHf37, and the ADR sub $4.
Call Details
Date/Time: Wednesday, May 11th at 12:30pm EDT Add To Calendar: CLICK HERE
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Confirmation Number: 13729549
Live Video Link CLICK HERE
