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Will Lower US Travel Affect Flight Centre's Stock?
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A report from Australian Financial Review uncovers an unclear outlook for travel sector shares such as Flight Centre Travel Group Ltd ( ASX: FLT ) shares.
The report suggests that uncertain economic situations along with apprehensions about traveling to the U.S. might decrease Flight Centre’s profits for this fiscal year by over $100 million.
On Monday Flight Centre has indicated that achieving the previously stated FY 2025 guidance for an UPBT between $365 million and $405 million seems improbable. The firm currently does not expect to meet the required year-over-year growth rate of 14% to 26.5%.
The forecast for FY 2025 UPBT has been revised to fall within the range of $300 million to $335 million.
According to AFR:
The Trump administration has intensified immigration screenings and border control policies, causing apprehension amongst tourists and travelers who fear encountering an unwelcoming environment upon visiting the U.S. According to official statistics, March witnessed the most significant decline in visitors coming from Australia since the onset of the COVID-19 outbreak, with tourist arrivals decreasing by 7 percent.
The share price of Flight Centre has dropped by 23.64% in the year 2025.
Is now a good time to purchase Flight Centre shares as a bargain?
Even with the decline in travel to the United States, Flight Centre CEO Graham Turner remains upbeat. He expressed his confidence in achieving record transaction numbers for the year ending June 30th.
He additionally mentioned that the firm would keep its dividend distribution unchanged.
Turner said:
Overall, the higher-class cabins, especially for lengthy international flights, are maintaining their quality quite well.
Brokers are predicting a recovery for Flight Centre shares, with Bell Potter setting a target price of $18.45, indicating nearly a 45% increase.
Macquarie has lower confidence in the prospects of Flight Centre shares. According to the broker, obstacles such as shifting US policies and a significant decrease in consumers' desire for leisure trips could impede near-term expansion.
The broker has a 12 month price target of $16.20.
In another development, Trading View has set a one-year price target of $17.33 for Flight Centre shares.
The online brokerage platform SelfWealth has been assigned an average price target of $18.03.
Corporate Travel Management Ltd ( ASX: CTD )
As reported by the Australian Financial Review, although travel to the United States remains low, business trips to other regions have kept increasing.
This might be good news for travel companies listed on the ASX. Corporate Travel Management Ltd ( ASX: CTD ).
This company offers services for managing business travels encompassing corporate trips, conferences and events, as well as leisure journeys and loyalty programs.
The business spans operations throughout Australia and New Zealand, North America, Asia, and Europe.
It has dropped by 16.58% in the past year, however, brokers anticipate a recovery.
Bell Potter presently has a target price of $17.48 for CTD shares, suggesting an increase potential of 34.66%.
Earlier this month Morgan Stanley assigned an overweight rating along with a share price target of $18.30.
The post Could reduced US travel affect Flight Centre's stock performance? appeared first on The Motley Fool Australia .
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More reading
- 3 Stocks listed on the ASX that have considerable presence in the U.S. market
- What could be causing the Flight Centre share price to drop today?
- Bell Potter identifies the top low-cost ASX 200 shares to purchase.
- Which sectors does Macquarie expect to see lower demand if there is an economic slowdown?
- Travel to the US is down this year. Will Australia's tourism sector benefit?
Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Corporate Travel Management. The Motley Fool Australia has positions in and has recommended Corporate Travel Management. The Motley Fool Australia has recommended Flight Centre Travel Group. The Motley Fool has a disclosure policy This article includes solely general investment guidance (covered under AFSL 400691). Authorized by Scott Phillips.
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