Own Flight Centre shares? Here’s what the market expects from its half year results

A woman ponders a question as she puts money into a piggy bank with a model plane and suitcase nearby.

A woman ponders a question as she puts money into a piggy bank with a model plane and suitcase nearby.

Despite being the most shorted share on the Australian share market, the Flight Centre Travel Group Ltd (ASX: FLT) share price has been on fire this year.

Since the start of 2023, the travel agent’s shares have risen an impressive 26%.

Investors appear to be betting on a strong performance from Flight Centre in FY 2023.

This could make it worth watching Flight Centre shares closely next week when the company releases its half year results on 22 February.

Ahead of the release, let’s take a look at what the market is expecting.

What is the market expecting from Flight Centre?

Well, the good news is that a lot is already known about Flight Centre’s performance during the half.

That’s because earlier this month the company released a trading update to support its capital raising and revealed a performance ahead of consensus estimates.

Flight Centre revealed that it expects to report total transaction value (TTV) of $9.9 billion, group revenue of $1.0 billion, and group underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $95 million.

However, there are a few things that could be worth looking out for outside these metrics.

For example, according to a note out of Morgans, its analysts are looking forward to digging deeper into its earnings.

The broker suspects that the company’s Corporate business could be delivering the goods and contributing strongly to its earnings. It commented:

The 1H23 beat to consensus was led by the strong profitability of Corporate. This business is on track to deliver record TTV in FY23 (MorgansF is ~A$11.6bn vs pre-COVID of A$9.0bn). November EBITDA was in line with the monthly run rate implied at the AGM (A$14.5m/month). December EBITDA was lower given usual seasonality. If we conservatively assume December EBITDA was A$7.5m, this would equate to 1H23 Corporate EBITDA of ~A$80m. FLT is continuing to gain market share through high customer retention rates and material new account wins.

And given how Flight Centre’s earnings are expected to be heavily weighted to the second half, Morgans is likely to be looking out for another update on its guidance. It added:

FLT has provided FY23 EBITDA guidance of A$250-280m. This was below Morgans previous forecast of A$289.5m. However it was largely at the midpoint of FactSet consensus of A$266.3m. This guidance is prior to any benefits from the acquisition. The midpoint of guidance implies a 35%/65% 1H vs 2H split, which is broadly in line with FLT’s historical seasonality.

The post Own Flight Centre shares? Here’s what the market expects from its half year results appeared first on The Motley Fool Australia.

Should you invest $1,000 in Flight Centre Travel Group Limited right now?

Before you consider Flight Centre Travel Group Limited, 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 Flight Centre Travel Group Limited 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.

See The 5 Stocks
*Returns as of February 1 2023

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);

More reading

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 Flight Centre Travel Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/72q9O3s

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s