The Webjet Limited (ASX: WEB) share price has been a solid performer on Wednesday.
In afternoon trade, the online travel agentâs shares are up 2% to $5.26.
Why is the Webjet share price rising?
Investors have been buying the companyâs shares today after it was the subject of a bullish broker note out of Goldman Sachs.
While Goldman has been bullish on the company for a while, it has become even more positive this week. So much so, the broker has added Webjetâs shares to its coveted conviction list.
According to the note, the broker has put a conviction buy rating and $6.50 price target on its shares.
Based on the current Webjet share price of $5.24, this implies potential upside of 24% for investors over the next 12 months.
What did the broker say?
Goldman believes that Webjet is well-placed for long term growth thanks partly to its Bedbanks business.
It also believes that the valuation of the Webjet share price will start to improve in the near future as the company demonstrates its strong recovery from the pandemic.
Goldman commented:
WEB is a structural beneficiary of the recovery from COVID with favorable exposure to the growing online channel and, more importantly, a strong positioning and improving scale in the niche Bedbanks segment. WEB has also demonstrated strong cash generation as the market recovers and valuation continues to be impacted by macro concerns.
We expect the valuation should start decoupling to reflect the fundamental strength of the company as opposed to being in line with other travel intermediaries in the short term. We are Buy rated with a 12m TP of A$6.50, implying 31% upside and total potential return of 34%, the largest upside across our Consumer services coverage. We add WEB to our ANZ Conviction List.
The post Webjet share price higher on bullish Goldman Sachs note appeared first on The Motley Fool Australia.
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More reading
- 5 things to watch on the ASX 200 on Wednesday
- Experts say these are the ASX 200 shares to buy next week
- What is the outlook for ASX travel shares for the rest of 2022?
- Broker says Webjet shares are one of its best buy ideas this month
- Did ASX travel shares do well in September?
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 Scott Phillips.
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