Key points
- Corporate Travel Management shares could be very cheap according to Morgans
- Its analysts have named the company as their top pick in the travel sector
- The broker’s price target implies 36% upside for investors
If you’re interested in gaining exposure to the travel sector, then Corporate Travel Management Ltd (ASX: CTD) shares could be worth considering.
That’s the view of the team at Morgans, which sees significant value in the corporate travel specialist’s shares.
What is Morgans saying about Corporate Travel Management?
According to the note, the broker is a fan of its proposed acquisition of the corporate business of Helloworld Travel Ltd (ASX: HLO).
It commented: “Corporate Travel Management recently announced its second major acquisition during COVID with Helloworld’s corporate travel business in ANZ for A$175m. The acquisition price appears reasonable, it meets CTD’s strict investment criteria, there are material synergies on offer, it is nicely EPS accretive, and significantly scales its ANZ business while further diversifying its client base and service offering.”
And while it acknowledges that the Omicron variant of COVID-19 has pushed back its earnings recovery, it is confident that demand will recover when it is safe to travel again.
Its analysts explained: “Some of CTD’s 2Q22 and 3Q22 will be impacted by the Omicron variant which has slowed travel demand globally. When trading slows, this impacts CTD’s margins given it has rehired staff in anticipation of the recovery. Most in the industry expect that travel demand will materially improve from March. We have consequently revised our forecasts. We continue to assume that earnings recover fully in FY24.”
Are Corporate Travel Management shares good value?
The broker notes that Corporate Travel Management shares are its key pick in the travel sector and could be very cheap at current levels.
Morgans has an add rating and $29.00 price target on them. Based on the current Corporate Travel Management share price of $21.31, this implies potential upside of 36% for investors over the next 12 months.
The post Top broker says Corporate Travel Management (ASX:CTD) shares can rise 36% appeared first on The Motley Fool Australia.
Should you invest $1,000 in Corporate Travel Management right now?
Before you consider Corporate Travel Management, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Corporate Travel Management wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of January 13th 2022
More reading
- Leading brokers name 3 ASX shares to buy today
- Why Corporate Travel Management, Goodman, Lendlease, and Uniti shares are rising today
- Leading brokers name 3 ASX shares to buy today
- 5 best ASX 200 travel shares of 2021
- 2 ASX travel shares that flew higher than Flight Centre (ASX:FLT) in 2021
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. owns and has recommended Helloworld Limited. The Motley Fool Australia owns and has recommended Helloworld Limited. The Motley Fool Australia has recommended Corporate Travel Management Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
from The Motley Fool Australia https://ift.tt/MA4awHnXQ
Leave a Reply