Research Update: Grupo Posadas Upgraded To 'B' From 'B-' On Continued Improvement In Operating And Financial Performance; Outlook Stable

Mexico-based lodging company Grupo Posadas S.A.B. de C.V. (Posadas) continues to benefit from favorable industry trends, including the ongoing recovery in occupancy and average daily rates (ADR). As a result, its revenue per available room (RevPAR) and EBITDA margin are consistently rising, also thanks to a strict-cost control. We expect Posadas to keep a prudent capital allocation in the next 12 months, while excess cash will help enhance its cash balance and further deleverage its capital structure. On Sept. 21, 2023, S&P Global Ratings raised its long-term issuer credit rating on Posadas to 'B' from 'B-'. The stable outlook on Posadas reflects our expectation that its RevPAR and EBITDA will continue to improve in the next 12 months thanks to

...- Mexico-based lodging company Grupo Posadas S.A.B. de C.V. (Posadas) continues to benefit from favorable industry trends, including the ongoing recovery in occupancy and average daily rates (ADR). As a result, its revenue per available room (RevPAR) and EBITDA margin are consistently rising, also thanks to a strict-cost control. - We expect Posadas to keep a prudent capital allocation in the next 12 months, while excess cash will help enhance its cash balance and further deleverage its capital structure. - On Sept. 21, 2023, S&P Global Ratings raised its long-term issuer credit rating on Posadas to 'B' from 'B-'. - The stable outlook on Posadas reflects our expectation that its RevPAR and EBITDA will continue to improve in the next 12 months thanks to solid occupancy rates, increasing ADRs, and tight operating costs control. We expect its adjusted net debt to EBITDA to approach 4x and its EBITDA interest coverage to be about 2.6x by the end of 2024....

Research Update