Shore Capital starts On The Beach at 'buy'

26th Jun 2023 12:58

(Sharecast News) - Shore Capital initiated coverage of On The Beach on Monday with a 'buy' rating, with a fair value of 170p and 75% upside potential.

"On the Beach (OTB) is a leading player in the short haul beach holiday market," the broker noted.

"Whilst revenue has returned to pre-pandemic levels, profit remains lower, and the group is facing competition from the rise of well-known travel names offering package holidays.

"On just circa 3x FY23F EBITDA, we believe the market is overly discounting this competitive backdrop along with near-term concerns on the supply/demand balance."

ShoreCap said it sees broadly favourable seat capacity with a significant market share opportunity.