Avolta shares jumped 5% after UBS upgraded the Swiss travel retailer to a 'buy' rating, raising its 12-month price target to CHF65 from CHF48. The brokerage cited improved capital discipline, favorable passenger growth, and a free cash flow yield that it says is not yet reflected in the stock's valuation.

Avolta's current price implies organic sales growth of only 1%-2% in 2026, well below UBS's forecast of about 4% and market expectations of 4%-6%. The company has shifted away from large acquisitions toward shareholder returns and debt reduction, with net debt to EBITDA declining to an estimated 0.9x in 2025 from approximately 4.5x in 2022.

UBS forecasts earnings per share of CHF3.16 in 2026, up 11.3% from an estimated CHF2.84 in 2025. Equity free cash flow is projected at CHF511 million, representing a yield of approximately 7.3%, above the stock's historical average of around 5% and the Swiss small and mid-cap average of 3% to 6%. The brokerage raised its 2026-27 equity free cash flow estimates by 2.5% to 5% on working capital efficiencies.