Avolta set for worst day in over 2 years after Barclays downgrade
** Shares in Avolta AVOL.S fall 8.3% after Barclays cuts the stock to "underweight" from "overweight", saying the Swiss duty-free retailer is entering a period of operational challenges likely to weigh on long-term growth
** Avolta has been benefiting from travel recovering to 2019 levels for the last 18 months, but this trend is ending as the group reaches 2019 volumes and margins in 2024, Barclays says
** It says Avolta's competitive position is at risk in North America, along with downside risks from weak Chinese sentiment and cautiousness flagged by luxury companies
** It says the Chinese fiscal package falling short of market expectations leads to a weaker spend expectation from Chinese travellers
** "We think recent political events further exacerbate structural issues already weighing on Chinese consumption," it adds
** The stock is on track for its worst day since June 2022 if the losses hold, and sits at the bottom of the Swiss mid-cap index .SMIM
Reporting by Ozan Ergenay
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