Kepler Cheuvreux has downgraded Amadeus IT Group, moving its rating to "reduce" and lowering the target price to €50 from €53 - a decline of 5.7% in the broker's valuation.
Along with the rating change, Kepler Cheuvreux trimmed its adjusted earnings-per-share forecasts for Amadeus, reducing the 2026 estimate by 3.9% and the 2027 estimate by 1.0%.
The broker noted that Amadeus shares have underperformed so far this year, characterising the weakness as "in line with other European software stocks," and added that "air traffic uncertainty has also weighed on" the stock.
Central to Kepler Cheuvreux's reassessment is a concern about the medium-term outlook for Air Distribution. The broker highlighted the interaction between IATA's New Distribution Capability (NDC) - described as "an XML/JSON-based standard developed by IATA that allows airlines to distribute their content directly and more flexibly to travel sellers" - and advances in artificial intelligence. Kepler Cheuvreux posed the question of whether this combination "could turn Air Distribution into a slower-growth business over the medium term, causing Amadeus's growth to moderate from the high-single-digit rates delivered in recent quarters."
Amadeus's own reported results for the first quarter, released early last month, showed continued growth across several metrics. Group revenue increased 3.1% year-on-year to €1.68 billion, or 7.9% when measured at constant currency.
Operating income rose 2.8% to €474.9 million. On an adjusted basis, EBIT reached €500 million, representing a 6.6% increase at constant currency. Adjusted diluted earnings per share grew 8.8% at constant currency, and free cash flow was €273.6 million, up 4.5% from the prior year.
The company maintained that it expects to meet its full-year guidance and said it would inform the market should that outlook change.
Analysis summary
- Kepler Cheuvreux's downgrade reflects concerns that distribution standardisation via NDC, combined with AI, may slow the Air Distribution segment's growth.
- The broker has modestly reduced Amadeus's near-term EPS forecasts and lowered its target price by 5.7%.
- Amadeus's first-quarter results showed revenue and profit growth, and management reaffirmed full-year guidance.