BUZZ-Citigroup resumes leisure sector coverage seeing double-digit growth, names Whitbread and Sodexo top picks

Citigroup resumes coverage for leisure sector companies, as it sees multi-year, double-digit growth potential in sector's leaders and chooses Whitbread WTB.L and Sodexo EXHO.PA its overall and contract catering subsector, respectively, top picks

It highlights that investors can find high-quality industry leaders that compound earnings, supported by favourable fragmented market structures enabling technology deployment at scale, which further boosts competitiveness

It also notes attractive pricing dynamics in hotels, with dynamic pricing according to demand, and in caterers, with about 65% contracts inflation-linked and structural cost advantage

The broker adds the sector's exposure to key themes of, for instance, experiential consumption, nutrition, and both cyclical and defensive demand drivers also adds to its appeal

It resumes Whitbread ("buy") on anticipated positive RevPAR growth and Sodexo ("buy") citing H2-weighted contract wins