Are Australian COVID-19 outbreaks weighing on the travel company’s valuation?
The post Why the Webjet (ASX:WEB) share price has fallen 5% in a week appeared first on The Motley Fool Australia. –
The Webjet Limited (ASX: WEB) share price has dipped since this time last week, despite no news having been released by the company. However, the company may be feeling the pressure as COVID-19 continues to rear its head.
Right now, the Webjet share price is sitting at $4.97. This time last week it was $5.21. That represents a 4.61% fall in just 5 trading days.
Let’s take a look at what might be dragging on the travel company.
COVID-19 hits Australia once more
One possible reason the market has gone cold on Webjet is the resurgence of coronavirus cases in Australia.
The Webjet share price commonly drops when outbreaks and lockdowns occur in Australia’s major cities – as do those of many ASX-listed travel shares.
Right now, Sydney has been in a soft lockdown for nearly 2 and a half weeks.
Sydney documented 112 new infections yesterday, a record number of daily infections for New South Wales.
Additionally, domestic travel was slowed as travellers from Darwin and Alice Springs, much of Queensland, and Perth and Peel were barred from travelling to several states. The areas faced lockdowns recently, but domestic border restrictions for COVID-free areas have largely eased over the last 7 days.
New Zealand also tightened travel restrictions with much of Australia as lockdowns raged.
While it’s been a bad week for the Webjet share price, it’s still 3.11% higher than it was at the end of its first trading day after Sydney entered its 7-day lockdown.
Sydney’s lockdown has since been extended. It’s been pinpointed to end on Friday. However, New South Wales Premier Gladys Berejiklian has said it’s likely to be extended again.
Webjet share price snapshot
2021 has been tough for the Webjet share price – it’s fallen almost 2% year to date.
Though, it’s still 67.91% higher than it was this time last year.
The company has a market capitalisation of around $1.8 billion, with approximately 379 million shares outstanding.
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Motley Fool contributor Brooke Cooper 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 has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.