Cautious Hold Rating for Melia Hotels: Balancing Optimism and Valuation Challenges

In a report released today, Jaina Mistry from Jefferies maintained a Hold rating on MELIA HOTELS INTERNATIONAL (0MKO – Research Report), with a price target of €7.50.

Jaina Mistry’s rating is based on several factors influencing Melia Hotels International’s current and future performance. While the company’s FY24 sales and EBITDA met expectations, and net income exceeded consensus estimates by 22%, the overall outlook remains cautious. The company’s optimistic trading outlook for 2025, with expected RevPAR growth and increased demand, suggests potential for slight improvements in EBITDA if margins are maintained.
However, the declining pipeline is a concern, prompting a more conservative stance. Additionally, Melia’s current trading multiple of 6.5x EV/EBITDA NTM is below its historical average of 10x, indicating potential valuation challenges. These mixed signals contribute to the Hold rating, as the company shows promise but also faces uncertainties that warrant a cautious approach.