The Flight Centre (ASX:FLT) share price is in the green today. Here’s why

Flight Centre shares are in focus on reports that the international border could soon open.
The post The Flight Centre (ASX:FLT) share price is in the green today. Here’s why appeared first on The Motley Fool Australia. –

The Flight Centre Travel Group Ltd (ASX: FLT) share price is currently up as international borders may reportedly open sooner than expected. That compares to the S&P/ASX 200 Index (ASX: XJO) which is currently down around 2.2%.

What’s happening with international borders?

It is being reported across the major media outlets, such as the Australian Financial Review, that Prime Minister Scott Morrison is going to announce that international travel is soon going to open up for fully vaccinated Aussies.

The reporting says that Australians will be able to leave Australia. People stuck in other countries will also be able to return easier.

However, this is only when the double vaccination rate of 80% has been reached. The international borders will lift on a state by state basis when that region reaches its own 80% level. NSW and ACT are expected to be the first two places to reach the required vaccination rate to allow international travel.

The plan is that the international border is going to be open before Christmas. Part of the plan could include arrivals going through home quarantine rather than hotel quarantine.

The Flight Centre share price is still down almost 40% from the pre-COVID level, so international travel may have its part to play in a recovery.

Not all state leaders have signed up to the international travel plan just yet.

The Guardian quoted Queensland Premier Ms Palaszczuk from her news conference, she said:

I’m not going to agree to anything when I haven’t seen any formal paperwork. It would be irresponsible and I think that Queenslanders would expect me to see some paperwork, to understand the issues before an announcement is made. So it’s a bit disappointing that we haven’t been given that due courtesy before National Cabinet.

What I’ve said clearly and Dr Young has said this and the Health Minister has said this. We need to be in a situation where every eligible person, so every eligible person in that cohort is offered a vaccine.

How is Flight Centre’s profit going?

There wasn’t a profit in FY21. It made an underlying loss of $507 million, with almost $4 billion of total transaction value (TTV).

However, it did say that the recovery is gaining momentum, particularly in the corporate sector and in the US. In its FY21 result, it said that it was seeing month-on-month sales revenue growth despite lockdown and heavy restrictions, ending with a COVID-period record in June 2021.

By the year end, corporate TTV was tracking at 40% of pre-COVID levels globally.

Flight Centre is targeting a return to monthly profitability in both corporate and leisure during FY22. The company is looking to the resumption of further global international travel, with a potential material benefit from the trans-Atlantic route opening.

Its profitability hopes rely on vaccination efficacy, governments reopening borders and keeping them open.

Is the Flight Centre share price a buy?

Citi isn’t sure that it is, with a neutral rating and a price target of $16.94. That suggests the broker thinks Flight Centre shares could fall around 20% over the next 12 months.

Whilst Citi is expecting Flight Centre to benefit from the travel recovery, it doesn’t think the old Flight Centre model will be as effective.

The post The Flight Centre (ASX:FLT) share price is in the green today. Here’s why appeared first on The Motley Fool Australia.

Should you invest $1,000 in Flight Centre right now?

Before you consider Flight Centre, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Flight Centre wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Why the Webjet (ASX:WEB) share price is on the rise today
ASX 200 (ASX:XJO) midday update: Gold miners jump, Pro Medicus wins contract

These were the 5 best performing ASX 200 shares in September

These were the 5 worst performing ASX 200 shares in September

5 things to watch on the ASX 200 on Friday

Motley Fool contributor Tristan Harrison 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.

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!