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Sabre (SABR), American Express Tie Up to Improve Corporate Travel

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Sabre Corporation SABR recently announced a long-term, multi-faceted strategic partnership with the New York-based American Express’ AXP Global Business Travel (“GBT”). Per the deal, the travel tech company will be jointly developing technologies with GBT in an effort to enhance corporate travel distribution over the next decade.

With the growing demand for user-specific travelling needs among the corporations and corporate travelers, both Sabre and GBT will be accelerating product innovation. The companies will also be collaborating on corporate travel booking capabilities, accelerating merchandising and retailing solutions, and enabling efficient and superior customer services.

American Express’ GBT will make a multi-million dollar, annual investment with Sabre to design new and differentiated products and services for the corporate travellers in long term. Together, the partners will expedite the gradual recovery of global travel industry, particularly, the corporate travel industry from the pandemic blues.

Sabre's extensive suite of software and technology solutions for retailing and content aggregation combined with GBT's corporate customer software and services is likely to advance global business travel experiences to new heights.

The partnership, which is to be effective from January 2022, is likely to aid Sabre in expanding its customer share and driving its Travel Solutions segment revenues. The company’s transactions related to Global Distribution System (“GDS”), which works like a marketplace connecting travel suppliers with the buyers, are likely to see an increase.

Sabre Corporation Price and Consensus

Sabre Corporation Price and Consensus
Sabre Corporation Price and Consensus

Sabre Corporation price-consensus-chart | Sabre Corporation Quote

Sabre has its customer base spread over 160 nations with more than 425,000 agency partners globally. It is one of the largest marketplaces in the world that manages approximately $260 billion worth of global travel spending annually.

With a rise in vaccination efforts and lifting of restrictions worldwide, Sabre is well-poised to capitalize on the travel industry's improving market scenario. The company’s Travel Solutions segment revenues totaled $390 million in the third quarter compared with $237 million in the year-ago quarter.

Sabre has been winning consecutive deals from major global airlines, hoteliers and travel agencies of late. Recently, in November, it inked a long-term partnership with the Hanover, Germany-based TUI Group to globally distribute the latter’s own hotel brands, including TUI Blue, Robinson and TUI Magic Life. Prior to that, it entered a distribution partnership with Calafia Airlines to enable distribution of flights and services to travel agencies in the United States through its travel marketplace, thus helping the airline accelerate revenue growth and market reach.

Earlier in November, it partnered with Japan-based Hotel Keihan Chain to create tourism opportunities in the country. Separately, it entered a distribution agreement with the second-largest hotel group in China, Huazhu Group, to expand global reach for its upscale and luxury hotel brands and support the latter’s global growth strategy.

However, it is worth mentioning that Sabre refrained from issuing an outlook citing uncertainty about the impact of the pandemic on its financials recently. During the fourth quarter, the company usually suffers from seasonality in the travel industry. Revenues from travel bookings decline massively during the quarter, especially in December, as holiday related bookings are done in the earlier part of the year. Business travels also decline during the month, hence overall revenues fall.

Zacks Rank & Stocks to Consider

Sabre currently carries a Zacks Rank #4 (Sell), while American Express carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector are Advanced Micro Devices AMD and Qualcomm QCOM, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Advanced Micro Devices’ fourth-quarter 2021 earnings has been revised upward by 7 cents to 75 cents per share over the past 60 days. For 2021, earnings estimates have moved north by 1 cent to $2.64 per share in the last 60 days.

Advanced Micro Devices’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 14%. Shares of AMD have rallied 57% in the YTD period.

The consensus mark for Qualcomm’s first-quarter fiscal 2022 earnings has been raised to $3.01 per share from $2.78 in the past 30 days. For fiscal 2022, earnings estimates have been revised upward by 8.6% to $10.49 per share in the past 30 days.

Qualcomm’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 11.2%. Shares of QCOM have gained 15.9% YTD.


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