Accor: Accor ousted Alstom from the CAC 40

(BFM Bourse) – Euronext’s Scientific Council gave its verdict this Thursday evening. The hotel group will integrate the Parisian index at the expense of the railway equipment manufacturer.

Accor will sign its return to the CAC 40, more than three years after leaving it. The scientific council of Euronext has decided, and the hotel group will soon integrate the most important index of the Parisian market, instead of the railway equipment manufacturer Alstom, announced. Stock Exchange Operator.

Euronext said the change will take effect on March 15 after the market closes.

Already expected to return to the CAC 40 last December, during the previous revision of the stock indices, Accor was pulled from the index in September 2020, amid the pandemic. The company, then led by Sebastien Bazin, was replaced by…Alstom.

“We are proud to see Accor re-enter the CAC 40, a great success that testifies to the hard work and incredible commitment of our teams (…) After a record financial year in 2023, the Group is off to a great start. The year 2024 is solid, thanks to the increase in occupancy rates and strong demand, which allows us to look forward to the coming years with optimism,” replied Accor CEO Sébastien Bazin, quoted in the company’s press release.

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According to UBS, there is still potential for Accor

The hotel group has performed well in the stock market in recent months. Accor is up 14% since the start of 2024 and nearly 24% in a year.

The company rode a recovery in tourism, raised its annual outlook several times last year, held an investor day that was deemed a success, had its credit rating raised by the agencies, and announced a buyback of shares. So many good boxes are ticked.

Accor two weeks ago published record results for 2023, with gross operating income (Ebitda), its highest ever, exceeding 1 billion euros, a sign of a recovery in hotel operator activity.

Encouraged by the release, UBS Bank bought the stock last week.

“We believe that a further increase in the multiple (stock market valuation, editor’s note) is possible if management continues to implement its strategy and therefore narrows the valuation gap compared to comparable companies such as (British) IHG”, explained the Swiss bank. .

In contrast, Alstom was a good candidate to exit the CAC 40, even if teleperformance, which lost more than 23% this Thursday, could also be threatened. Alstom has the lowest market capitalization of the CAC 40 (roughly 4.6 billion euros) and has lost more than 57% in a year.

Also change to SBF 120

Its shares fell nearly 38% in a session in the autumn after the group announced it had burned through more than a billion euros in cash in the first half of its stalled fiscal year.

The company is currently considering several avenues to strengthen its financial balance sheet, including a potential capital increase. Its aim is to reduce its debt and thereby maintain its credit rating, which is currently at the bottom of the non-speculative category and is threatened by Moody’s. The agency assigns a negative outlook for this rating.

Getting the cash back is imperative to kick-starting Alstom’s stock market redemption when it publishes its annual results on May 8… ahead of a possible return to the CAC 40.

The CAC 40 is not the only Parisian index to experience a change in composition. The SBF 120, another key barometer of the Parisian market, recorded three exits: retirement home specialist Clarion (formerly Korean), which suffered heavy stock market losses due to the fragility of its balance sheet, renewable energy producer Voltalia and home appliances and cultural goods specialist Fnac Darty.

In contrast, two companies will enter the SBF 120: cement producer Vicat, which has recently delivered good annual results, and oil group Mourel et Prom.

Remember that the Euronext Scientific Council, to decide whether to enter or leave the index, is based on two rankings of Parisian stocks: weight in terms of floating market capitalization and trading volumes. Although these rankings serve as support for scientific advice, they do not constitute exclusive criteria.

“It is more or less accepted that the Euronext Scientific Council, beyond the technical criteria, can take into account other issues, such as the sectoral diversity of the CAC 40”, explained the finance professor of the BFM Bourse, Pascal Quéry, at the end of 2023. at HEC and co-authored the Verniman letter.

Julian Marion – ©2024 BFM Bourse