In this equity research report, analysts Joel Persson and Oscar Persson provide a comprehensive analysis of Unlimited Travel Group (UTG), a Swedish event and travel agency group. Despite historical challenges, including inconsistent management turnover and significant pandemic-related disruptions, UTG is poised to capitalize on a robust recovery in underlying demand for personal travel, projected to grow at a CAGR of 7.5% through 2030E. Further operational enhancements, particularly in the cash conversion cycle, are expected to establish a new normalized level of net working capital. Based on a 70/30 weighted DCF and peer valuation, a target price of SEK 28.9 per share is implied, representing an upside of 68.3%.
Investment Thesis
● Market tailwinds and premium customer segment makes for stedy top-line growth
● Travel bookings are made further in advance together with a new payment provider, deriving a new standardized level of NWC
● By being the largest player, UTG could benefit from the fragmented market and acquire smaller agencies for favourable multiples