Morningstar

Clearer Skies Ahead for Sabre

Clearer Skies Ahead for Sabre
Securities In This Article
Sabre Corp
(SABR)

Dan Wasiolek: Sabre's Global Distribution System, or GDS, is the engine allowing flight of airline bookings at traditional travel agents or websites like Expedia. Sabre is one of only three to dominate this GDS industry, driving network and efficient scale advantages.

Sabre shares have lost altitude this year while the S&P has soared to new heights. This turbulence is due to some lost business, incremental cloud investment, and industry anxiety over airliners bypassing the company's network. But as we discuss in our recent report titled "Sabre Shares Set to Gain Altitude; Investors Should Buckle Up," we see these headwinds as largely temporary or unfounded and believe the company’s shares have clearer skies ahead. This view is supported by recent wins that validate Sabre's technology, reinforced by ongoing investments that are aided by new executive hires with experience implementing platform revitalizations at other organizations. Further, we see investors' concern of carriers bypassing Sabre's network as exaggerated, buoyed by agent and airliner comments on the difficulty in replicating the company's efficient scale and network effect advantages.

With shares trading at a meaningful discount to our $26 fair value estimate, we view Sabre shares as attractive.

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About the Author

Dan Wasiolek

Senior Equity Analyst
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Dan Wasiolek is a senior equity analyst, AM Consumer, for Morningstar*. He covers gaming, lodging, and online travel. Names covered within the gaming industry are Wynn Resorts, Las Vegas Sands, MGM Resorts, Caesars Entertainment, Penn Entertainment, and DraftKings. In the hotel industry Dan covers Marriott, Hilton, InterContinental, Hyatt, Wyndham, Choice, and Accor. Other travel related names under his coverage are Booking Holdings, Expedia, Airbnb, Tripadvisor, Sabre, and Amadeus.

Before joining Morningstar in 2014, Wasiolek spent 16 years as an analyst and portfolio manager covering US mid- and large-cap strategies for Driehaus Capital Management. During the first half of his time at Driehaus, Dan’s responsibilities as an analyst included analyzing and recommending stocks across all sectors and industries for inclusive in the portfolios. Then in the second half of his tenure at Driehaus, Dan was responsible for stock selection and portfolio management of the US mid- and large-cap strategies, as well as co-managing in-house smaller-cap portfolios.

Wasiolek holds a bachelor’s degree in business administration from Illinois Wesleyan University and a master’s degree in business administration, with a concentration in finance, from the DePaul University Kellstadt School of Business.

* Morningstar Research Services LLC (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

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