Insights

The Flight Centre (ASX:FLT) share price dropped 60% in 2020: Will 2021 be better?

The Flight Centre Travel Group Ltd (ASX:FLT) share price crashed 60% lower in 2020. But one broker thinks 2021 could be a lot better…
The post The Flight Centre (ASX:FLT) share price dropped 60% in 2020: Will 2021 be better? appeared first on The Motley Fool Australia. –

A traveller dressed in colourful shirt and panama hat looking puzzled, indicating uncertainty in the travel share price

The Flight Centre Travel Group Ltd (ASX: FLT) share price was well and truly out of form in 2020.

The travel agent giant’s shares were among the worst performers on the S&P/ASX 200 Index (ASX: XJO) with a whopping 60% decline.

Why did the Flight Centre share price crash lower in 2020?

Investors were of course selling the travel agent’s shares due to the negative impact the coronavirus pandemic was having on bookings.

With travel markets coming to a standstill at the height of the pandemic, Flight Centre was left generating next to no revenue and still had considerable operating costs to pay.

This led to the company having to undertake a material capital raising, which diluted shareholders, to give it the liquidity it needed to survive the crisis.

It also resulted in the company delivering a huge loss in FY 2020. For the 12 months ended 30 June 2020, Flight Centre reported an underlying loss before tax of $510 million. This was before one-off items, including COVID-19 induced expenses of $339 million.

On a statutory basis, Flight Centre delivered a loss of $849 million before tax.

Will 2021 be better for the Flight Centre share price?

One leading broker that believes Flight Centre’s shares could be market beaters in 2021 is Bell Potter.

This morning it retained its buy rating and $19.00 price target on the company’s shares. This price target implies potential upside of approximately 20% over the next 12 months.

Although the broker acknowledges that there is a lot of uncertainty in the short term because of COVID-19, it remains very positive on the future. Bell Potter is particularly positive on its corporate business and expects this to be the key driver of growth over the long term.

It also believes that the company will eventually restore its earnings at higher margins. This is due partly to the removal of structural costs.

This could make Flight Centre one to watch in 2021.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of June 30th

More reading

Motley Fool contributor James Mickleboro 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.

The post The Flight Centre (ASX:FLT) share price dropped 60% in 2020: Will 2021 be better? appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!