Strong start to the year YoY, but very much in line with expectations Q1 sales came in at EUR440m (+11% YoY), very much in line with our expectations (-0.7% vs BNPP Exane estimates). Owned and Leased REVPAR amounted to EUR102m in 1Q 24 (+17% YoY), driven by occupancy rates (+400pbs YoY) and higher prices (+10% YoY). The positive performance was clearly driven by resorts in the Canary Islands (REVPAR +20% YoY) and those in the Caribbean (REVPAR +16% YoY), while operating metrics of urban hotels in EMEA also grew positively at double digits (REVPAR +12.6%). Good margins, but no deleverage in Q1 EBITDA amounted to EUR98m (+25%YoY and in line with BNPP Exane estimates) while margins reached 22.3% in Q1 (+260bps YoY) on lower variable rents due to the transfer of the Equity Inmuebles portfolio and cost measures. Net debt stood at EUR2,630m, which implies an increase of EUR30m due to seasonality and higher financing costs. FY24 guidance upgraded and short-term outlook still compelling Melia''s management upgraded the company''s FY24 EBITDA target by EUR25m to EUR525m and increased the target of room openings by 2.5k to c.7k. Management also reiterated its intention of achieving a leverage ratio (pre IFRS) below 2.5x. Additionally, the short-term outlook remains positive for resorts with on the book data pointing to double-digit growth for the summer season. Estimates and TP upgraded, Neutral recommendation unchanged We lift our EBITDA by 5% on average in FY24-25, driven by higher prices in Spain and America, which leads us to raise our TP to EUR7.8/share (from EUR7.1). However, we stick to our Neutral rating. We see the good start to the year as already priced in (shares are c.+25% YTD). Melia currently trades at 9.2x FY24 EV/EBITDA, in line with historical multiples, and we think VA consensus estimates at EUR519m already factor in the FY24 target, limiting further consensus upgrades.