UBS upgrades SSP Group to “buy,” raises PT to 245p on cash flow turnaround
#UBS upgrade #SSP Group #Buy rating #Cash flow turnaround #Travel recovery #Price target 245p #Airport retail #Post-pandemic investment
📌 Key Takeaways
- UBS upgraded SSP Group to 'buy' rating
- Price target raised to 245p
- Upgrade based on expected cash flow turnaround
- Recovery in travel sector supporting positive outlook
📖 Full Retelling
UBS analysts upgraded SSP Group to a 'buy' rating and raised their price target to 245p on the London market on Tuesday, citing an expected cash flow turnaround at the travel food services provider following pandemic recovery. The upgrade represents a significant shift in UBS's assessment of the company, which had previously held a more neutral position on SSP Group. The analysts highlighted improving operational performance and stronger-than-expected cash generation as key factors behind their revised outlook. The 245p price target suggests potential upside of approximately 15% from the stock's previous closing price, indicating confidence in the company's growth trajectory. SSP Group, a major player in the airport and travel retail food and beverage sector, has been navigating the challenging post-pandemic recovery period. The company operates across approximately 30 countries, serving travelers in airports, train stations, and motorway service areas. UBS's positive assessment comes as global travel continues to rebound, with passenger numbers approaching pre-pandemic levels in many regions.
🏷️ Themes
Financial Markets, Travel Industry Recovery, Investment Strategy
📚 Related People & Topics
SSP Group
British foodservice company
SSP is an operator of food and beverage outlets in travel locations. The company, headquartered in London, England, is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.
UBS
Multinational investment bank headquartered in Switzerland
UBS Group AG (stylized simply as UBS) is a Swiss multinational investment bank and financial services firm founded and based in Switzerland, with headquarters in both Zurich and Basel. It holds a strong foothold in all major financial centres as the largest Swiss banking institution and the world's ...
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Original Source
UBS upgrades SSP Group to “buy,” raises PT to 245p on cash flow turnaround
UBS raised its rating on SSP Group Plc to “buy” from “neutral” on Tuesday, setting a 12-month price target of 245p, up from a prior target of 180p, citing improving free cash flow generation and rising aviation capacity across the group’s key markets, sending shares up over 6%. The upgrade centers on what UBS describes as a turning point in SSP’s cash conversion. The airport and rail food-and-beverage operator has long drawn market criticism for failing to translate revenue and profit growth into meaningful cash returns.
UBS said that dynamic is now shifting. The bank forecast free cash flow of £102 million in FY26, rising to £154 million by FY30, with FY25 marking the first post-COVID year in which SSP did not carry material catch-up capital expenditure requirements. Capex as a percentage of sales fell from 8.1% in FY24 to 5.8% in FY25, according to UBS estimates based on company data.
“The risk reward looks increasingly skewed to the upside,” the analysts wrote, pointing to a three-year earnings per share compound annual growth rate of 14% and a forecast free cash flow yield of 7.5% in FY26.
Aviation capacity data underpins the near-term revenue outlook. Using Cirium DIIO data, UBS said planned capacity across the group’s European footprint was tracking around 5% growth for the April-to-June quarter, with the UK expected to reach 4%-5% growth over the same period after a flat February. North American capacity continues to grow at low single digits, while Australia and Thailand show stronger momentum. India, where SSP holds a 50% stake in the listed entity TFS, saw capacity growth expectations revised down in recent months, though the bank noted Indian capacity returned to growth in January 2026.
SSP reported like-for-like revenue growth of 5% in the first quarter of FY26, up from 3% in the prior quarter, according to company data cited in the report.
On the balance sheet, UBS forecast...
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