Upgrade Overview

Morgan Stanley upgraded Accor SA to Overweight from Equal‑Weight and named it a Top Pick, citing an expected 2027 inflection in RevPAR, net unit growth, fee algorithm and cash returns that should offset near‑term disruption from weaker Middle East travel demand. The broker raised its price target to €55 from €51, implying an 18% upside, and upgraded the FY27 RevPAR forecast to 3.5% from 2.6%, which it said would lift EBITDA by roughly 1%.

Financial Forecasts

Morgan Stanley projects RevPAR growth of 2.3% in 2026 accelerating to 3.5% in 2027. Group EBITDA is forecast at €1.27 bn for 2026, €1.39 bn for 2027 and €1.51 bn for 2028. Corresponding earnings per share are €2.28, €2.87 and €3.39 respectively. Net unit growth is expected to improve from 3.2% in H1 2026 to 4.1% in FY27e and 4.3% in FY28e, after the “Revo” headwind disappears from Q2 2027.

Cash‑Return Programme

The current share‑buyback programme is slated to complete by October 2026. Over the following 12 months Morgan Stanley expects a €500 million Essendi‑funded buyback, an additional €0.4 billion buyback financed by free cash flow and a €0.3 billion dividend, taking total distributions above €1 billion – roughly 10% of Accor’s market capitalisation.

Regional Performance

UAE RevPAR fell 53% and MEA RevPAR 25% in Q2 2026, improving to declines of 20% and 4% respectively in July. The broker anticipates the RevPAR trajectory to improve from Q2 2027 as weak Middle Eastern comparatives annualise. The Middle East accounted for about 12% of Accor’s fee revenue in 2025, double the exposure of its global peers.

Strategic Developments

Accor is exploring a potential listing of its lifestyle business Ennismore, with a decision expected by the end of Q3 2026. Press reports value the transaction at an enterprise value of €3.2 billion based on FY25 financials. The company trades at roughly 11 times EV/EBITDA and 16 times FY27e P/E, about 25% below asset‑light peers such as IHG, Hilton and Marriott and below its own historical multiples.

Risks

Morgan Stanley highlights several risks: a still‑soft Middle East market through early 2027, net‑unit growth lagging peers, earnings‑quality and mix concerns, and uncertainty around management transition. Chairman and CEO Sébastien Bazin has confirmed he will depart no later than May 2028. The broker’s valuation range sets a bull case of €70 and a bear case of €37, implying 50% upside and 20% downside from the base case.