DAVY VIEW

One could be a buyer of this wonderful business, but On The Beach Group (OTB) is subject to profound uncertainties over a raft of very material external factors, all of which are out of its control. Yet, the business model is solid. The brand, like all good brands, puts the customer first — though this is not as common as one would imagine. We see the equity as fairly valued on the basis of a return to a revenue and profitability profile which was established prior to the COVID pandemic, and we will look for incremental catalysts before changing our view. We initiate with a ‘Neutral’ recommendation and a price target of 350p.