Next week will be a big week for the Webjet Limited (ASX: WEB) share price.
The online travel agent is scheduled to hand in its highly anticipated half year results on Wednesday 24 November.
Ahead of the release, I thought I would look to see what the market is expecting from Webjet.
What should you expect from Webjet’s results?
Webjet is widely expected to release a much-improved result for the six months ended 30 September. However, it is likely to be far too soon for a return to profit.
For example, Goldman Sachs is forecasting a 611% increase in total transaction value (TTV) to $668.6 million, revenue of $52.5 million, an EBITDA loss of $13.4 million, and a net loss after tax of $35.5 million.
The broker, which has a buy rating and $7.00 price target on Webjet’s shares, also expects the company to finish the period in a strong financial position despite its loss. Goldman expects the company’s net cash position to be at $117 million.
What else is being said?
The team at Citi are a little more cautious and have warned investors that Webjet’s costs could negatively surprise.
Citi commented: “Webjet reports 1H22 results on the 24th of November. The key areas of interest for us in the result are: Near term costs — We estimate the market is underestimating B2B costs in 1H22. The market is implying ~$40 million for the half which implies zero growth in cost base from FY21 despite the elevated activity.”
Its analysts have a neutral (high risk) rating and $6.35 price target on the Webjet share price.
Is the Webjet share price a buy?
Opinion remains extremely divided. While Goldman clearly sees a lot of value in the Webjet share price, Citi continues to sit on the fence with its neutral rating.
It is also worth noting that Webjet is one of the most heavily shorted shares on the Australian share market. This appears to be an indication that there is a group of investors out there that are convinced the company’s result will disappoint. Though, it is worth acknowledging that if they are wrong and Webjet impresses, they could quite easily get caught up in a short squeeze.
Time will tell what happens, but it certainly will be worth watching Webjet’s shares very closely next week.
The post Why all eyes will be on the Webjet (ASX:WEB) share price next week appeared first on The Motley Fool Australia.
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More reading
- Top brokers name 3 ASX shares to buy today
- Is the Webjet (ASX:WEB) share price a buy ahead of its half year results?
- Why are Webjet (ASX:WEB) shares still being shorted in November?
- These are the 10 most shorted ASX shares
- 2 ASX shares that may be too good to ignore
Motley Fool contributor James Mickleboro 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.
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