This travel agent’s shares were on fire this week…
The post Is the Flight Centre (ASX:FLT) share price good value? appeared first on The Motley Fool Australia. –
The Flight Centre Travel Group Ltd (ASX: FLT) share price was a very strong performer this week.
The travel agent’s shares rose an impressive 23% over the five days.
Why did the Flight Centre share price jump 23?
There were a couple of catalysts for the rise in the Flight Centre share price last week.
One was the prospect of international travel returning soon and the other was the release of its full year results for FY 2021.
In respect to the latter, while the numbers from that result did not look pretty (Flight Centre posted a loss after tax of $364 million), comments by management helped boost investor sentiment.
Flight Centre’s CEO, Graham Turner, revealed that he believes the company could become profitable again during FY 2022.
Mr Turner said: “Looking ahead, we believe our position as a diversified global business with compelling customer offerings across three main travel divisions – leisure, corporate and supply – will be of enormous value and a great advantage to us and to our major suppliers. Although we can’t predict the future, given the current government-enforced restrictions, we are targeting a return to monthly profitability later in FY22 and to return to pre-COVID TTV by June 2024, but with significantly reduced ongoing operating costs.”
Is it too late to invest?
One leading broker that is sitting on the fence with the Flight Centre share price is Goldman Sachs.
According to a note out of the investment bank, its analysts have retained their neutral rating and lifted their price target to $18.30.
Based on the current Flight Centre share price of $16.89, this implies potential upside of 8.3% over the next 12 months.
Goldman commented: “Overall, the positive progress of the corporate business and travel recovery in the Northern hemisphere is encouraging. However, we view these as mostly priced in, especially given the higher risk of ongoing uncertainties in the ANZ region which on a pre-COVID basis contributed to c. 57% of the group EBITDA.”
“We revise our earnings forecasts materially in FY22 to c. A$-1.8mn EBITDA with significant losses in 1H22 being offset by profits over 2H22. We expect all regions except ANZ to return to positive profits. We also revise our 12m Target Price on FLT to A$18.30, offering a total return of +7.6%. We maintain our Neutral rating,” it added.
Should you invest $1,000 in Flight Centre right now?
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.