Leisure Sector Note
Anywhere to shelter in a recession?
Our universe of small-mid cap Leisure stocks have dropped between 13%-60% since August’21. With market sentiment towards consumer facing stocks at a low point, we assess downside EPS risk in a recession, screen for sales / EPS sensitivities and identify the well capitalised companies. At a sector level, given the macro outlook, we view Q4-22 and Q1-23 as critical to assessing how: (i) consumer discretionary spend is faring; and (ii) any evidence of cost inflation stability.
Stocks mentioned in the note include:
City Pub Group (CPC), Fulham Shore (FUL), Gym Group (GYM), Hollywood Bowl (BOWL), Loungers (LGRS), Marston’s (MARS), Restaurant Group (RTN) and Ten Entertainment (TEG)
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