BofA starts HBX with 'buy', sees 91% upside potential

BofA starts coverage on Spanish travel technology company HBX Group HBX.MC with "buy" rating, predicting a 91% upside potential

The broker sees HBX's revenues outpacing the market at an 8.5% CAGR in 2024-2029

The bank cites key drivers such as bundling mobility and experience, with the accommodation offering likely to raise take-rates, as well as the recently launched fintech and insurance services

Despite similar growth rates, it notes the company trades 18%/49% below key rivals Amadeus AMA.MC and WEB WEB.AX, and adds it sees substantial long-term valuation upside potential as HBX executes its growth plans over time

It says accommodation accounts for 88% of HBX revenues in hugely fragmented market, where top four competitors (Expedia EXPE.O, TBO TBOT.NS, Web Travel Group, HBX) hold only about a 10% share

"We expect the market to consolidate toward the large companies, as most small operators are sub-scale and increasingly less competitive as large companies increasingly differentiate with technology," it adds

It highlights that HBX is expanding into fast-growing areas like car rentals, transfer and experiences, in a market that's expected to grow 13% CAGR in the next few years