HALISTER1: Cancun Hotel Operator Cut to Sell by Gimme Credit on Weaker Peso

Cancun Hotel Operator Cut to Sell by Gimme Credit on Weaker Peso

(Bloomberg) -- While Grupo Posadas expects peso weakness to lure more tourists to company’s hotels this quarter, Gimme Credit says the FX impact will “significantly” raise total debt by year-end and lead to “worse” credit ratios, analyst Cedric Rimaud writes in Jan. 30 note.
  • Rimaud cuts view on Grupo Posadas 7.875% bonds due in 2022 to “underperform” from “outperform”
  • NOTE: Jan. 24: Mexico’s Posadas expects 15% y/y rise in tourists in 1Q
  • Increase in total debt in local currency terms driven by FX depreciation “is a worry,” Rimaud writes
  • Gimme Credit “skeptical” that company will see expected impact on revenue because most of Grupo Posadas’ hotels are aimed at business travelers in urban areas and thus more dependent on economic prospects
  • Mexico economy expected to grow more slowly in 2017 due to uncertainties related to trade and higher interest rates, which pressure consumption, Gimme Credit says
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
POSADASA MM (Grupo Posadas SAB de CV)

People
Cedric Rimaud (Rimaud Cedric)

To de-activate this alert, click here

UUID: 7947283