Company Announcements

Classification of NuWays AG to DO & CO AG

Company Name:	DO & CO AG
ISIN:	AT0000818802
Reason for the research:	Update
Recommendation:	BUY
Target price:	EUR 250
Target price on sight of:	12 months
Last rating change:
Analyst:	Simon Keller

Staying on course, chg

Equity story unchanged. The prolonged Strait of Hormuz closure and related fuel-supply risk warrant a more cautious near-term view. Still, DO & CO’s growth and margin expansion case remains intact, with any potential pressure seen as temporary.

Route mix to cushion potential volume risk: Airlines are likely to cut less profitable short-haul routes before reducing long-haul capacity, where network relevance and yields are higher. For example, Lufthansa is removing 20,000 short-haul flights through October, reducing summer capacity by only c. 1% in Available Seat Kilometers. This matters for DO & CO, as premium and long-haul flights carry materially higher catering value than short-haul routes. Hence, an increasing number of flight cancellations does not imply a proportional hit to DO & CO-relevant catering volumes, in our view.

Turkish Airlines / IST looks set to benefit from rerouting: Middle East carrier weakness and regional airspace disruption should favour Turkish Airlines and Istanbul Airport, both key DO & CO partners. For Europe-Asia traffic seeking to avoid Gulf disruption, Istanbul is one of the most logical rerouting hubs. This is already visible in the data: Turkish Airlines’ passenger growth accelerated to +16.0% yoy in March, from +9.4% yoy in February. At the same time, Istanbul Airport passenger growth rose to +8% yoy in March, from +2.5% yoy in February. DO & CO is strategically positioned for this shift, having broken ground on its new 150,000 sqm Istanbul gourmet kitchen, set to become the world’s largest fresh food gourmet kitchen and a key capacity backbone at the hub.

Flexible cost base to protect margins: DO & CO’s Airline Catering model is structurally margin-protective. Around one-third of sales are open-book contracts with fixed agreed margins, while the remaining business is supported by fixed handling fees, volume-linked meal revenues and pass-through clauses for wage and raw material inflation. Combined with a lean cost structure, with variable costs equivalent to c. 80% of sales, this should cushion margins even if flight volumes soften.

Competitive position of strength versus peers: DO & CO is focused on the resilient premium segment and competes from a much stronger financial position than key peers. The group runs at c. 8.7% EBIT margin and only 0.2x net debt/EBITDA, giving it flexibility to defend service quality, invest in capacity and stay disciplined in tenders. The comparison to gategroup underlines DO & CO’s relative strength. The world’s largest airline caterer remains financially constrained, with negative shareholders’ equity, 3.25x net debt/EBITDA and net losses in each of the last three years.

Action: Estimates are cut to reflect a more cautious near-term macro backdrop around fuel supply, mainly delaying part of the expected growth and margin expansion. The revised estimates are still broadly in line with consensus (eCons 26/27: sales growth 8.8% yoy, EBIT margin 8.9%).

BUY, new PT € 250 (old: € 266), based on DCF.

You can download the research here: do-co-ag-2026-05-06-update-en-d4a92
For additional information visit our website: https://www.nuways-ag.com/research-feed

Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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