Reviewing the latest trading updates of Qantas Airways ((QAN)) and Serko ((SKO)) makes for an encouraging read through for Flight Centre, suggests Macquarie, with clear evidence of tailwinds in the domestic and A&NZ space.
Even then, the broker warns of downward pressure on revenue with airlines cutting commissions, and lower revenue margins in a recovery where there is a shift to domestic and to online.
The broker assumes an 80-85% total travel value (TTV) recovery in FY24. Also, in line with the company’s expectations, Macquarie expects both leisure and corporate to recover to pre-pandemic levels in FY24.
Outperform rating with a target of $17.50.
Sector: Consumer Services.
Target price is $17.50.Current Price is $14.92. Difference: $2.58 – (brackets indicate current price is over target). If FLT meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges – negative figures indicate an expected loss).
