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Webjet (ASX:WEB) share price tumbles: Is this a buying opportunity?

This online travel agent’s shares are under pressure today…
The post Webjet (ASX:WEB) share price tumbles: Is this a buying opportunity? appeared first on The Motley Fool Australia. –

The Webjet Limited (ASX: WEB) share price has started the week in the red.

In afternoon trade, the online travel agent’s shares are down 2.5% to $5.08.

This latest decline means the Webjet share price is now down 20% from its March high.

Why is the Webjet share price dropping?

The weakness in the Webjet share price today comes despite there being no news out of the company.

However, potentially weighing on its shares today was a broker note out of Macquarie Group Ltd (ASX: MQG) relating to rival Flight Centre Travel Group Ltd (ASX: FLT).

According to that note, the broker has downgraded Flight Centre’s shares to a neutral rating and cut the price target on them by 11% to $15.50.

That note reveals that Macquarie has pushed back its earnings recovery estimate for Flight Centre by six to nine months due to recent lockdowns in Australia following the outbreak of the COVID-19 Delta variant.

It suspects that Flight Centre’s total transaction value (TTV) will now only reach 65% of FY 2019 levels in 2023. This compares to its previous expectation of hitting 80% at that point.

One positive, though, is that corporate demand remains robust thanks to the government and mining sectors.

Is Webjet’s weakness a buying opportunity for investors?

Despite downgrading Flight Centre, Macquarie hasn’t made any changes to its Webjet recommendation at this stage.

It currently has an outperform rating and $6.35 price target on the company’s shares. Based on the current Webjet share price, this implies potential upside of 25% over the next 12 months.

Another broker that might see the weakness in the Webjet share price as a buying opportunity is UBS.

Late last month it put a buy rating and $5.90 price target on its shares. Its analysts see the company as a top re-opening option for investors.

The post Webjet (ASX:WEB) share price tumbles: Is this a buying opportunity? appeared first on The Motley Fool Australia.

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More reading

Why is the Flight Centre (ASX:FLT) share price slipping 2% today?
These are the 10 most shorted ASX shares

What’s the outlook for the Webjet (ASX:WEB) share price?
If you’d invested $2,000 in Webjet (ASX:WEB) shares 10 years ago, here’s what it would be worth now
Here’s why the Webjet (ASX:WEB) share price moved in circles during July

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 owns shares of and has recommended Webjet Ltd. 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.

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