UBS has upgraded SSP Group to buy from neutral and raised its 12-month price target to 245p from 180p, citing a turning point in the airport and rail food-and-beverage operator's cash conversion. The investment bank forecasts free cash flow of £102 million in FY26, rising to £154 million by FY30, with FY25 marking the first post-COVID year without material catch-up capital expenditure requirements.

Capital expenditure as a percentage of sales fell from 8.1% in FY24 to 5.8% in FY25, according to UBS estimates based on company data. The analysts point to a three-year earnings per share compound annual growth rate of 14% and a forecast free cash flow yield of 7.5% in FY26. Aviation capacity data underpins the near-term revenue outlook, with planned capacity across SSP's European footprint tracking around 5% growth for the April-to-June quarter.

On the balance sheet, UBS forecasts SSP's net debt to EBITDA leverage falling to 1.5x by the end of FY26, the bottom of the group's 1.5x-2x target range. At that leverage level, the bank calculates buyback capacity of approximately £190 million, equivalent to more than 10% of the current market capitalization. UBS also flagged potential value from SSP's Indian operations, where a partial disposal of half the 50% stake in listed entity TFS could generate proceeds of £300 million at current market values.