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2 ASX shares brokers expect to fly higher

The 2 ASX shares in this article are liked by brokers and could fly higher. One of those picks is Corporate Travel Management Ltd (ASX:CTD).
The post 2 ASX shares brokers expect to fly higher appeared first on The Motley Fool Australia. –

asx share price rise represented by red paper plane flying away from other white paper planes

There are a handful of ASX shares that multiple brokers have a high opinion of and believe could generate good returns.

All analysts may have different thoughts and opinions on different businesses. One broker could think Commonwealth Bank of Australia (ASX: CBA) is the best bank to buy, whilst another broker could think CBA is a sell and that Westpac Banking Corp (ASX: WBC) is the one to buy.

However, if multiple brokers think that the same ASX share is a buy then it could be a good starting point for thinking about a business.

With that in mind, here are two ASX shares from the travel industry that multiple brokers like:

Corporate Travel Management Ltd (ASX: CTD)

This ASX share is liked by at least six brokers.

One of the brokers that likes Corporate Travel at the moment is Credit Suisse. Whilst it’s still expecting 2021 to be a COVID-19-affected year, 2022 may deliver materially better revenue as high levels of demand is satisfied, profitability remains high because of a lower cost base and the company takes market share.

The broker also noted that the Corporate Travel Management share price has fallen since the end of November. There has been a 16% decline since 25 November 2020.

At the end of September 2020, Corporate Travel Management announced the acquisition of Travel & Transport, which is a North American corporate travel business. It had US$2.8 billion of total transaction value (TTV) in the 2019 calendar year. It also generated US$29 million of pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) in 2019. Over 60% of that TTV was made from corporate air travel, with another 30% from hotels.

The US$200.4 million acquisition was funded by the ASX share with a capital raising. Based on a pro-forma 2019 figures, Corporate Travel expects the acquisition to be 10% accretive for earnings per share (EPS) excluding synergies, and 30% accretive including synergies.  

Credit Suisse has a price target of $22 for Corporate Travel Management shares.

Alliance Aviation Services Ltd (ASX: AQZ)

Alliance Aviation Services is liked by at least three brokers.

The company describes itself as Australasia’s leading provider of contract, charter and allied aviation and maintenance services. Its main clients are in the mining, energy, tourism and government sectors. It currently operates a few dozen Fokker aircraft and has also acquired 30 E190 jet aircraft over the last year. Those acquisitions are intended to be progressively added to the fleet throughout 2021 and 2022 to provide the company with growth capacity.

Broker Morgans points to the record interim FY21 result for Alliance Aviation and strong operating cashflow as reasons to be positive on the business. Alliance’s management believe further growth can come and that belief is supported by the Qantas Airways Limited (ASX: QAN) wet lease agreement that was recently signed.

After the result, which saw underlying profit before tax rise 72.3% to $26.7 million and operating cashflow rise 225.3% to $47.5 million, Morgans increased its underlying net profit before tax estimate for FY21 by 10%.

Morgans has a share price target for Alliance Aviation of $5.25.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post 2 ASX shares brokers expect to fly higher appeared first on The Motley Fool Australia.

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