Accor's €440M Buyback Boosts Shareholder Value Amid Sector Recovery

The hospitality sector's recovery continues to gather momentum, and Accor (ACFP.PA) is leveraging its financial strength to amplify shareholder returns. The French hotel giant's completion of the first €200 million tranche of its €440 million share buyback program—announced on May 23, 2025—signals unwavering confidence in its valuation and long-term growth trajectory. This strategic move not only reduces the outstanding share count but also positions Accor as a compelling investment in a sector ripe for resurgence.

A Strategic Move to Enhance Value

The buyback's completion marks a pivotal step in Accor's capital allocation strategy. By repurchasing 4,627,761 shares at an average price of €43.22, Accor has immediately reduced its outstanding shares by 1.89%, from 244 million at year-end 2024 to approximately 239.4 million. This reduction directly supports earnings per share (EPS) accretion, building on the 5% EPS growth recorded in 2024, which rose to €2.33 from €2.22, driven by prior buybacks.

The program's scale—€440 million total, with further tranches expected—underscores management's conviction that Accor's stock is undervalued. In a sector still recovering from pandemic disruptions, such confidence is rare. The buybacks also align with Accor's 50% payout ratio based on recurring free cash flow, ensuring dividends remain robust even as capital is redeployed to reduce dilution.

Liquidity and Financial Health: A Foundation for Growth

Accor's ability to execute this buyback program reflects its strong liquidity and operational discipline. The company's 2024 results showed a net profit of €754 million, up 17% year-on-year, with free cash flow surging to €1.2 billion. This financial resilience allows Accor to balance shareholder returns with reinvestment in its global portfolio—spanning 5,300 hotels across 120 countries—without compromising growth.

The buybacks also serve as a defensive measure. By reducing shares outstanding, Accor mitigates dilution risks and strengthens its balance sheet, ensuring it can capitalize on acquisition opportunities or further market recovery. The €400 million buyback completed in 2024 already reduced shares from 252 million to 244 million, proving management's track record in executing such programs effectively.

Why Accor is a Value-Accretive Play Now

Investors seeking exposure to the hospitality sector's recovery should prioritize companies with capital efficiency and shareholder-friendly policies. Accor ticks both boxes:
1. EPS Accretion: With shares reduced by 2.6% since 2023, further buybacks could boost EPS by an additional 1–2% annually, compounding the 2024 gains.
2. Dividend Stability: A 7% dividend increase in 2024 to €1.26 per share, paired with buybacks, creates a total return package unmatched by peers.
3. Sector Leadership: Accor's diversified portfolio—spanning luxury brands like Sofitel to budget chains like ibis—ensures it can thrive across economic cycles.

Conclusion: A Strategic Opportunity

Accor's share buyback program is more than a tactical move—it's a testament to management's belief in the company's intrinsic value. With shares trading at 18x 2024 EPS (well below pre-pandemic multiples), investors gain entry into a defensive, cash-generative stock poised to benefit from rising travel demand. The completion of the first €200 million tranche is a clear call to action: Accor is now a must-own stock for portfolios seeking growth with a margin of safety.

Act Now: With buybacks boosting EPS and dividends, and liquidity reserves to fuel future initiatives, Accor's valuation is set to rebound. This is a rare opportunity to invest in a sector leader at a discount—don't miss it.