Sabre Earnings: Market Searches for Negatives but Demand, Profitability, and Liquidity Improving

Sabre shares retreated a low-single-digit percentage on concerns regarding slower future air bookings growth, which we think is a misguided conclusion. Rather, our takeaway from Sabre’s update is that the demand recovery is progressing as expected and it is gaining share. Further, management announced plans for $200 million in incremental expense savings by 2024, provided detailed 2025 EBITDA guidance of at least $900 million, which was above FactSet consensus of $799 million (but in line with our $933 million forecast), and laid out plans to reduce debt—harmonizing with our existing prognosis. We don’t plan to materially change our $10.50 per share fair value estimate and view shares as meaningfully undervalued.