eDreams - Why book flights if you can levitate?

All,

Please refer to our current analysis here.

Given everybody has been vaccinated and the pandemic is now behind us, our e-Dreams shares have popped sooner than we thought, trading well above the E3.- per share, we had targeted. eDreams remains a high conviction position, but the equity position is now at 4.7% of NAV - not counting the bonds - and needs to be at least trimmed.
The company is reporting tomorrow and although we are more negative than consensus on earrings for the remainder of this year, we think that on a reasonable outlook e-Dreams should be able to pay down its RCF by end of next year again and find back to less than 5x leverage, avoiding a rights issue altogether.
However, with shares now up more than 50% from where we bought them and largely so on the vaccine spike alone, we fear they might again trade-off in the coming weeks as the reality sets in that early in the year - when eDreams typically receive the bookings, the pandemic will in fact still be with us. We are therefore getting ready to sell tomorrow or on the following days, depending on information provided tomorrow and on the market reaction to it.

Wolfgang

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E: wfelix@sarria.co.uk
T: +44 203 744 7003

www.sarria.co.uk

Wolfgang FelixE-DREAMS