Flight Centre Travel Group Ltd (ASX: FLT) shares are edging lower on Thursday.
In afternoon trade, the travel agentâs shares are down a fraction to $18.46.
This follows a lukewarm response to the companyâs half-year results release earlier this week.
Should you buy Flight Centre shares following its results?
Firstly, letâs take a step back and look at what the company delivered during the first-half.
Flight Centre reported the tripling of its total transaction value (TTV) to $9.9 billion, a 217% increase in revenue to $1 billion, and a modest $2.4 million underlying loss after tax. The latter was a major improvement on the $188 million loss it recorded a year earlier.
However, as this result was largely pre-released at the end of last month, there wasnât much that wasnât already known. This may explain why investors have responded in the way they have.
So, should you buy Flight Centre shares?
A number of analysts appear to be sitting on the fence right now and are suggesting that investors wait for a better entry point.
For example, Morgans has responded to the results release by reiterating its hold rating with an improved price target of $19.11. This implies modest upside of 3.5% for Flight Centre shares from current levels.
However, the broker does concede that there is potential for material upside if the company delivers on its medium term margin guidance. In fact, it has suggested that Flight Centre could be âextremely undervaluedâ if it does. The broker commented:
We maintain a Hold rating with a new A$19.11 price target. However we note that if FLT achieves its margin targets in FY26, there is material upside to consensus earnings and the stock is extremely undervalued. Given its changing business mix and different margin profile, execution is the key risk.
All in all, Flight Centre could prove to be a great ASX share to hold onto for the long term if you believe management will deliver on its targets.
The post Are Flight Centre shares a buy following the ASX 200 company’s latest results? appeared first on The Motley Fool Australia.
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More reading
- Flight Centre share price tumbles despite losses narrowing
- Flight Centre share price on watch as revenue triples, reaching $1b
- Here are the 10 most shorted ASX shares this week
- Own Flight Centre shares? Here’s what the market expects from its half year results
- Are whales dipping in and out of this ASX 200 travel share?
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.
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