DAVY VIEW

We update our Hostelworld forecasts to reflect the greater-than-anticipated impact on booking volumes from the conflict in the Middle East. This initially impacted Europe to Asia/Oceania, but more recently it also saw some volume impact on long haul between Europe and the Americas. It also alluded to a modest impact from lower organic web traffic as AI answered more searches. The company is now guiding to c.10% net revenue growth for FY26 and mid-single-digit growth in FY27. We reduce our EPS by 11% in FY26 and 23% in FY27. The refreshed targets from management now seem more attainable. Consistent execution against these will be essential to a re-rating.