ASX travel shares, including Qantas Airways Limited (ASX: QAN) and Flight Centre Travel Group Ltd (ASX: FLT), have taken a serious beating from the coronavirus pandemic.
Both companies plummeted to 52-week lows on 19 March last year and have struggled to recover as travel restrictions took hold and Australia and the world went into lockdown.
Over the past 12 months, the Flight Centre share price is still down 45.5%. The Qantas share price has gained more ground, but it still has another 2.9% to go to reach where it was a year ago.
Credit Suisse plugs Qantas and Flight Centre
According to today’s Australian Financial Review (AFR), Credit Suisse has positions in both Qantas and Flight Centre.
Here’s what Credit Suisse Private Banking portfolio manager Mike Jenneke had to say:
These companies have very good hibernation strategies and that will see them through the present downturn. The vaccine news is positive and there’s risks obviously but when it’s safe to do so, it will recover.
Demand is pent up and we think we’ll see a pretty significant rebound in travel. These kind of stocks will be volatile but we think there is an overall opportunity there.
Struggling to touch pre-pandemic numbers
The AFR notes that while the S&P/ASX200 Index (XJO) has regained ground, the Qantas share price is 30% lower than pre-pandemic levels. AFR estimates that the Flight Centre share price is 60% lower.
Senior portfolio manager of American Century Investments, Brent Puff, said that since the air services industry was one of the hardest hit by COVID, he sees opportunity.
Mr Puff recently added Booking Holdings Inc (NASDAQ: BKNG) to his portfolio. He believes that the Booking.com business has a far way to recover and that pent up travellers will resume their regular habits once the vaccine widely circulates.
Foolish takeaway
While ASX travel shares and the air services industry, in particular, put themselves back together in the aftermath of COVID, analysts see opportunity in the recovering companies. The expert advice to savvy investors is to keep an eye on updates on the vaccines and changes to travel restrictions.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of February 15th 2021
More reading
- Flight Centre (ASX:FLT) share price drops despite UK update
- The latest ASX shares that brokers have upgraded to “buy”
- These are the 10 most shorted shares on the ASX
- Is the Qantas (ASX:QAN) share price a buy?
- ASX 200 Weekly Wrap: Friday carnage ruins last week of ASX earnings
Gretchen Kennedy owns shares of Flight Centre Travel Group Limited and Qantas Airways Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Booking Holdings. The Motley Fool Australia has recommended Booking Holdings and 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.
The post Why analysts are backing these 2 ASX travel shares appeared first on The Motley Fool Australia.
from The Motley Fool Australia https://ift.tt/3kJrJEe
Leave a Reply