In a report released today, Victor Cheng from Bank of America Securities upgraded Sabre (SABR – Research Report) to a Buy, with a price target of $6.10.
Victor Cheng has given his Buy rating due to a combination of factors that suggest a positive outlook for Sabre. The easing of near-term risks related to disintermediation and market share loss has bolstered confidence in the company’s future performance. Additionally, recent financial results have strengthened the belief in Sabre’s ability to meet its fiscal year 2025 targets, with an expected 7% compound annual growth rate in revenue from 2024 to 2026, supported by significant new business wins.
Cheng also highlights the attractive valuation of Sabre’s stock, noting that the company is trading at 8 times its estimated 2025 EBITDA. This, combined with a reduced weighted average cost of capital, enhances the investment appeal. The company has managed to extend debt maturities and is expected to refinance at lower rates, which, along with competitive new solutions, provides Sabre with the potential for sustainable growth despite high interest expenses and leverage.