The Webjet Limited (ASX: WEB) share price has performed exceptionally over the past 6 months. Although the digital travel business has continued to be suppressed by restrictions imposed as a result of the COVID-19 pandemic, the company’s shares have surged.
Presently, shares in the $2.36 billion company are up 17% in the last 6 months. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has climbed a steady 4.6% over the same timeframe.
Considering that Webjet’s revenue remains severely impacted by the pandemic, investors are likely wondering why the Webjet share price is outperforming the index. While the exact answer is up for interpretation, there are a few likely influencing factors.
The reopening trade
Essentially, investors are beginning to see the light at the end of the tunnel for travel shares as vaccination rates near reopening levels. In fact, today marks ‘Freedom day’ for residents of New South Wales after the state batten down the hatches for 107 days.
This comes as NSW reaches 90.3% of the over 16-year-old NSW population receiving their first dose. Likewise, over 60% of Australians over 16 are now fully vaccinated. For reference, at 80% fully vaccinated, domestic travel restrictions will not apply to vaccinated residents. Additionally, outbound travel restrictions will be removed for those inoculated against the virus.
This daily infographic provides the total number of vaccine doses administered in Australia
as of 8 October 2021
Stay up to date with COVID-19 vaccine information here: https://t.co/lsM33j9wMW pic.twitter.com/HtXuAozYh5
— Australian Government Department of Health (@healthgovau) October 9, 2021
As a result, ASX-listed travel shares have gotten a boost recently as investors eye the eventual reopening of domestic and international travel. While the Webjet share price may have outperformed the benchmark index, other travel companies have outdone its performance in the past 6 months.
- Flight Centre Travel Group Ltd (ASX: FLT) up 22.6% to $22.35
- Corporate Travel Management Ltd (ASX: CTD) up 22.8% to $23.36
- Helloworld Travel Ltd (ASX: HLO) up 41.2% to $2.89
Webjet share price gets a buy rating
It is often supportive of a higher share price whenever an analyst considers it a ‘buy’. In this case, analysts at UBS recently rated the Webjet share price a buy with a price target of $6.85.
According to the note, the broker expects pent-up demand for travel will be considered once restrictions are lifted. Hence, UBS’ target suggests a potential 9.6% upside from the travel company’s current share price.
The post Why the Webjet (ASX:WEB) share price has beaten the ASX 200 in the last 6 months appeared first on The Motley Fool Australia.
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More reading
- Can the Webjet share price fly to $7 by the end of 2021?
- It hasn’t been a great week so far for the Webjet (ASX:WEB) share price
- These are the 10 most shorted ASX shares
- Why ASX 200 travel shares are having a bumper day
- Up 5%, the Webjet (ASX:WEB) share price is back to March 2020 levels. Here’s why
Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Helloworld Limited. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited, Helloworld Limited, and 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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