Deutsche Bank has moved Amadeus IT Group from a hold rating to buy and increased its price target to €71.50 from €58, reflecting a reassessment of the Spanish travel technology firm’s exposure to agentic AI and the structural value of its distribution and airline IT businesses.
The upgrade follows direct discussions between Deutsche Bank analysts and Amadeus senior management, including Nikolaus Samberger, Senior VP Technology and Engineering, and Decius Valmorbida, President of Travel, as well as hands-on experiments the bank conducted with agentic AI tools for travel bookings. Deutsche Bank says those conversations and tests shaped its view that the market currently treats Amadeus’s global distribution system business as a low-value infrastructure layer and is overestimating the degree to which AI will erode volumes and pricing.
Analysts at Deutsche Bank acknowledge that AI can shift where travel demand originates and increase search intensity. However, they emphasize that AI does not eliminate the operational responsibilities that underlie the value of travel platforms - supplier connectivity, fulfillment, servicing, disruption management, corporate workflow integration, and Airline IT capabilities remain necessary components of the booking ecosystem.
To quantify downside, the bank constructed a severe bear case in which AI-driven disintermediation extends into complex itinerary handling and mix protection weakens. Even in that scenario, Deutsche Bank estimates a roughly 5% reduction in earnings-per-share for 2028 compared with its base case, a decline the analysts characterize as manageable rather than an earnings cliff.
Separately, Deutsche Bank's reverse discounted cash flow analysis suggests the market is pricing in free cash flow growth of approximately 3.5% from 2028 onward at the current share price. That implied growth rate sits below Amadeus’s own stated outlook, which calls for a high-single-digit compound annual growth rate in free cash flow over 2025-28.
The bank notes that the implied FCF trajectory embedded in the shares is broadly consistent with the 5% 2028 EPS downside from its hard AI bear case, indicating the stock's valuation may already reflect materialization of a pessimistic AI outcome.
On near-term estimates, Deutsche Bank nudged its 2027 and 2028 earnings-per-share forecasts up by about 1% while leaving 2026 largely unchanged. Market multiple context cited by the broker shows shares trading at about 14 times its 2027 estimated price-to-earnings and roughly 11 times enterprise value to EBIT. Those multiples sit well below 10-year medians of approximately 23 times P/E and 19 times EV/EBIT.
Valuation versus software peers remains constructive in Deutsche Bank’s view. The broker applied a 10% premium to the broader software group, using a simple peer average of around 20 times price-to-earnings and roughly 18 times enterprise value to unlevered free cash flow, citing Amadeus’s cash generation, mission-critical role in travel technology and growth profile.
Deutsche Bank highlights operational scale as a supporting fact: Amadeus processed 484 million travel agency air bookings in 2025 and connects to more than 60,000 travel sellers across over 190 markets. Those metrics underpin the bank’s assessment of Amadeus’s embedded franchise value across distribution and Airline IT.
The bank also outlines a set of clear downside risk factors that could pressure the thesis. These include weaker global air travel demand, an accelerated pace of AI-led disintermediation into booking execution and servicing, lower revenue per booking if mix protection fades, slower monetization of Airline IT, and increased competitive pressure from NDC, direct connect initiatives and alternative aggregators.
Analyst takeaways
- Deutsche Bank upgraded Amadeus to buy and raised its price target to €71.50 from €58 after direct management discussions and agentic AI experiments.
- The bank’s severe AI bear-case implies a roughly 5% EPS hit for 2028 versus its base case, a level the analysts deem manageable.
- Reverse DCF work suggests the market is pricing in about 3.5% FCF growth from 2028 onward, below Amadeus’s own high-single-digit 2025-28 FCF CAGR target.
Deutsche Bank’s note frames the upgrade as a view that while AI will change aspects of travel search and booking initiation, the operational and servicing functions that Amadeus provides are likely to sustain demand for its connectivity and airline IT products - and that the current market multiple appears to price in a pessimistic AI outcome.
What could change the view
- A faster-than-expected move of AI into booking execution and servicing that materially reduces volume or revenue per booking.
- Prolonged weakness in global air travel, which would affect volumes across distribution and airline IT.
- Failure to monetize Airline IT or increased substitution pressure from NDC, direct connect arrangements and alternative aggregators.