JPMorgan has released its outlook for the European leisure space heading into 2026, projecting that hotel operators are poised for a strong year thanks to improving travel trends and a series of region-specific catalysts.
Analysts expect the hotel industry to regain momentum after a subdued 2025, pointing to “more favorable” U.S. Revenue Per Available Room (RevPAR) comparisons from the second quarter onward, as well as the global uplift expected from the FIFA World Cup scheduled for June and July.
A rebound in China next year could further strengthen the backdrop, particularly for InterContinental Hotels (LSE:IHG), which the bank rates Overweight with roughly 20% upside. Accor (EU:AC) is also singled out as a candidate for further re-rating, helped by execution improvements and the planned sale of Essendi.
The tone shifts when JPMorgan assesses the gaming industry. While analysts acknowledge that the sharp second-half selloff in 2025 may have gone too far for Flutter (LSE:FLTR) and Entain (LSE:ENT)—both now upgraded to Overweight—they remain wary of broader sector risks. The two companies are described as having a “sound growth profile,” and are also seen as beneficiaries of a U.K. market that has “de-risked” following the latest budget.
For Flutter specifically, JPMorgan highlights one of the sector’s strongest growth frameworks, citing EBITDA expansion above 20% and EPS growth above 30% over 2026–2028, driven by U.S. market opportunities and consistent buybacks. Entain is viewed more positively as well, helped by operational gains in the U.K. and U.S., and by improving profitability at BetMGM.
However, the bank is notably more cautious on Evolution (USOTC:EVGGF) and FDJ United (EU:FDJU). Evolution has been placed on Negative catalyst watch, while FDJ received a rare double-downgrade to Underweight ahead of February results. JPMorgan’s estimates sit around 8% below consensus EBITDA for 2026–2027, citing a slower structural growth trajectory for Evolution and persistent regulatory pressures across FDJ’s core regions.
For FDJ, analysts caution that expectations may need to reset over a longer period, as affordability checks, rising taxes and softer performance in the Netherlands and U.K. continue to drag on its online operations.
Across the leisure sector more broadly, JPMorgan’s top picks for 2026 include InterContinental Hotels, Accor, Compass (LSE:CPG) and Flutter, while Evolution remains its primary Underweight call.
Leave a Reply