The Webjet Limited (ASX: WEB) share price is trading lower again on Tuesday.
In afternoon trade, the online travel agent’s shares are down 2% to $5.33.
This means the Webjet share price is now down 14% since this time last month.
Where next for the Webjet share price?
The market appears incredible divided on where the Webjet share price will be going next.
In one corner you have a number of bullish brokers such as Goldman Sachs and Morgans, whereas in the other corner you have a growing number of short sellers better against the company.
In respect to the latter, earlier this week Webjet’s short interest rose to 9.4%. This makes Webjet one of the most shorted shares on the Australian share market alongside Flight Centre Travel Group Ltd (ASX: FLT), which has 13.9% of its shares held short.
Short sellers appear to have concerns over its valuation and the travel market’s stuttering recovery from COVID-19, particularly given the emergence of the Omicron variant.
All in all, the bears appear confident there’s more chance of the Webjet share price falling than rising from here.
What about the bulls?
Last week Goldman Sachs retained its buy rating but trimmed its price target on the company’s shares to $6.90. Whereas a week earlier, Morgans upgraded Webjet’s shares to an add rating with a $6.60 price target.
Based on the current Webjet share price of $5.33, these price targets imply potential upside of 24% to 29% over the next 12 months.
Goldman commented: “Overall, WEB continues to make progress in the right direction through the reopening with the 20% cost savings target remaining intact for the Webbeds division. We continue to see a long term growth story in this business and view WEB as net beneficiaries of the post COVID recovery. We slightly lower our 12m Target Price to A$6.90 (vs. A$7.00 prior) and maintain our Buy rating on WEB.”
Morgans agrees and notes that Webjet’s shares are trading on attractive post-recovery multiples.
It said: “WEB’s share price has been weak this month as concerns around rising COVID cases and lockdowns in Europe have weighed on the sector. Following forecast changes, our blended valuation has risen to $6.60. With 16.4% [now 24%] upside to our new price target, we move to an Add rating. Based on our forecasts, WEB is trading on an FY24 recovery year PE of 17.9x which is at a discount to its five-year average PE (pre-COVID) of 20.6x.”
Time will tell whether it is the brokers or the short sellers that make the right call on the Webjet share price.
The post When it comes to the Webjet (ASX:WEB) share price, do the brokers or the shorters have it right? appeared first on The Motley Fool Australia.
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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 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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