Up 8% in 2023, is right now the time to buy back into Webjet shares?

The Webjet Ltd (ASX: WEB) share price has delivered returns for investors in 2023, but is it too late to buy?

Webjet shares have risen 7.77% since market close on the last trading day of 2022 and are now fetching $6.68 apiece at the time of writing.

In today’s trade, Webjet shares are down 2.42% amid a wider market fall. For perspective, the S&P/ASX 200 (ASX: XJO) is also 1.51% in the red today.

Let’s check the outlook for Webjet shares.

What’s ahead?

Broker outlook for Webjet is positive with travel booming this year in the wake of COVID-19 border closures and travel restrictions that plagued the industry in 2020 and 2021.

Australia’s borders reopened to international travellers on 21 February 2022.

However, recent research from Southern Cross Travel Insurance reveals 83% of Australians on the move this year plan to cut travel expenses due to the rising cost of living, Global Travel Media reported.

On the positive side, 87% of Australians are planning to travel within Australia or internationally within 12 months.

Webjet is an online travel business operating all over the world. The company also owns the global travel brand WebBeds.

Morgans is positive on the Webjet share price. The broker has placed a buy rating on the company with a $7.20 price target.

This implies an upside of 7.8% at the current share price. Analysts at Morgans believe Webjet is trading at a discount. Commenting on Webjet, Morgans said:

Based on our forecasts, WEB is trading on an FY24 recovery year PE which is at a discount to its five-year average PE (pre-COVID). Its WebBeds (B2B) business is highly leveraged to the northern hemisphere summer holiday season which is forecast to be strong.

Webjet OTA is leveraged to ANZ domestic and international travel. Management also wasted a crisis and cost reduction initiatives will reduce its cost base by 20% across the group once the business returns to scale.

Webjet subsidiary WebBeds last week announced an agreement with Luxembourg tour operator LuxairTours, broadening its customer base. Commenting on this news, WebBed Central Europe regional sales director Pepita Borrajo said:

We are pleased to be working with LuxairTours. The depth and breadth of our accommodation inventory means that whatever holiday a LuxairTours customer wants, it can be supplied through WebBeds.

Share price snapshot

The Webjet share price has jumped 18% in the past year amid the travel recovery. In the last month, the company’s share price has slid 1.33%.

Webjet has a market capitalisation of about $2.5 billion based on the current share price.

The post Up 8% in 2023, is right now the time to buy back into Webjet shares? appeared first on The Motley Fool Australia.

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More reading

Motley Fool contributor Monica O’Shea 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 no position in any of the stocks mentioned. 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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