Swiss banking giant UBS has adjusted its rating for Scandic Hotels Group AB (SHOT:SS) from Buy to Neutral, while simultaneously increasing its price target from SEK83.50 to SEK85.80. This decision reflects growing uncertainty about Sweden’s economic outlook despite generally positive conditions in the broader Nordic region.
The downgrade comes amid concerns about Sweden’s economic growth trajectory and potential foreign exchange challenges that could impact the hospitality sector. While interest rate reductions in the Nordic countries may boost demand for hotel services, domestic economic conditions present significant headwinds for Scandic’s operations.
Analysts at UBS identified potential growth opportunities for Scandic through its Scandic Go hotel concept, which could accelerate expansion plans through more efficient financing. However, the firm expressed concerns about the company’s ability to replenish its development pipeline for 2026, leading to revised downward forecasts for net unit growth.
Despite these challenges, UBS acknowledged Scandic’s potential for margin improvement through its high operating leverage. The firm cautioned, however, that these improvements are unlikely to materialize in the current year due to weaker-than-expected performance in the first half of 2025.
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UBS downgrades Scandic Hotels stock rating to Neutral on Swedish economic uncertainty By Investing.com
Investing.com – UBS downgraded Scandic Hotels Group AB (SHOT:SS) from Buy to Neutral while raising its price target to SEK85.80 from SEK83.50, citing increased uncertainty about economic growth in Sweden.
The research firm noted that while the generally positive macro outlook in the Nordic region, supported by interest rate cuts, could help demand for Scandic’s services, it flagged concerns about Swedish economic growth and foreign exchange headwinds this year.
UBS highlighted that declining financing costs and the signing of more lean Scandic Go hotels could help accelerate the company’s pipeline and net unit growth. However, the firm cautioned that Scandic is likely on a tight schedule to replenish its pipeline for 2026, which has driven UBS’s net unit growth forecasts lower.
The research firm also pointed to Scandic’s potential to improve margins given its high operating leverage, but suggested this improvement is unlikely to materialize this year due to weaker-than-expected performance in the first half of 2025.
Despite the downgrade to Neutral, UBS slightly increased its price target for Scandic Hotels Group to SEK85.80 from its previous target of SEK83.50.
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