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The QBE Insurance Group Ltd (ASX: QBE) share price closed 1.12% lower at $12.37 on Wednesday.

After a shaky period in 2021, QBE shares have rebounded once again, gaining almost 9% this year to date.

Meanwhile, in wider market moves, the S&P/ASX 200 Financials index (ASX: XFJ) closed down 1.08% today at 6,495.5.

More upside for QBE to come?

According to the team at JP Morgan, that could very well be the case. Its analysts are baking in considerable upside for QBE in 2022.

“As a global commercial insurer, QBE is subject to the vagaries of the insurance cycle and volatile natural catastrophes,” the broker said in a recent note.

“Trends in the cycle are currently improving, and there could be further upside from premium rates, providing a tailwind for earnings growth, with investment yields a headwind,” it added.

Building the case for JP Morgan was QBE’s income derived from gross written premium (GWP) in the previous quarter. It grew 19% on the prior corresponding period.

As a result, it has increased its earnings estimates for the company from 2023. Its analysts said:

We have increased earnings in CY23 approximately 10% due predominantly to some upside on yields and strong GWP.

CY22 earnings are impacted by perils and the run-off insurance contracts, offset by higher yields, leaving no room for material changes.

Upside catalysts include more success at taking expense and claim costs out of the business than we give credit for, a quick turnaround in the economy, a limited impact from COVID-19-related losses, stronger premium rate increases, and global interest rates holding up better than currently expected.

Consequently JP Morgan is overweight on QBE shares and urges its clients to buy at the current levels, valuing the company at $16.50 per share – an upside potential of 33% from the current share price.

JP Morgan is joined by an extensive list of 10 analysts also advocating buying the stock. That’s 91% of coverage with just one broker saying to hold, according to Bloomberg data. There are no sell ratings on this list.

Meanwhile, QBE shares continue powering on, and have now rushed 17% higher in the last 12 months after this most recent bull run.

The post Why does this broker see another 33% upside in the QBE share price? appeared first on The Motley Fool Australia.

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• QBE share price riding on these 3 ‘macro tailwinds’, analysts say

Motley Fool contributor Zach Bristow 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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The Pilbara Minerals Ltd (ASX: PLS) share price has been on a downhill trajectory over the past month.

Despite travelling 3.56% higher to $2.62 today, the company’s shares have, in fact, plummeted 20% since 11 April.

Below, we take a look at what has happened to Pilbara Minerals shares and if they might present a buying opportunity.

What’s going on with Pilbara Minerals shares?

The Pilbara Minerals share price continued to power ahead from mid-March to April on the back of investor hype.

However, the recent turn of events, such as interest rate hikes and an expected global economic slowdown, likely triggered its downfall.

On most days, anywhere between 20 million and 35 million of the company’s shares are swapping hands. Between 5 May and yesterday, Pilbara Minerals saw up to 51.2 million shares being exchanged on any single day.

With no company announcements within the last two weeks, investor attention has been turned to the spot price for lithium. While the value of lithium carbonate has rocketed since this time last year, prices have gradually eased.

Currently, the battery-making ingredient is fetching 462,500 Chinese yuan per metric tonne. This represents a 4.15% decline over the past month.

In addition, turmoil across global markets has also played a part in the company’s share price.

What do the brokers think?

A couple of brokers weighed in on the Pilbara Minerals share price following the company’s financial scorecard in February.

Analysts at Macquarie slashed its 12-month price target by 5% to $3.50 for Pilbara Minerals shares.

Meantime, Citi also reduced its rating by 5.4% to $3.50.

Based on the current share price, Macquarie and Citi’s take implies a potential upside of 37% for investors.

About the Pilbara Minerals share price

Regardless of its recent declines, the Pilbara Minerals share price has more than doubled in value over the past 12 months.

The company’s shares reached an all-time high of $3.89 in mid-January before sharply pulling back to December 2021 levels.

On valuation grounds, Pilbara Minerals presides a market capitalisation of roughly $7.68 billion.

The post Down 20% in a month, is the Pilbara Minerals share price a buy? appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• 2 ASX shares at ‘appealing’ buy prices right now
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Low charge: Is the party over for ASX lithium stocks?
• Why is the Novonix share price down 6% on Friday?

Motley Fool contributor Aaron Teboneras 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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The Money3 Corp Limited (ASX: MNY) share price has moved on a downhill trend since the start of the year. However, this could change following the company’s recent announcement that it will conduct a buyback of its shares.

At the time of writing, the automotive finance specialist’s shares are up 7.62% to $2.40 apiece.

Money3 shares to turn the tide?

According to its release, Money3 advised it will undertake a buyback of up to $15 million of its ordinary shares.

This will occur over the next 12 months through a series of on-market transactions as part of the company’s capital management strategy.

While Money3 will undoubtedly reduce its surplus capital, shareholder value will increase.

To break it down, when Money3 buys back its shares, the number of shares on its registry will decrease. With a lesser amount, this effectively increases the value of each share as the revenue and profits remain the same.

Traditionally, when this occurs, a company’s share price tends to rise over time.

Money3 noted the decision to buy back shares reflects the strong confidence of the group along with future growth prospects.

Money3 managing director, Scott Baldwin commented:

The company has over 20 years’ experience lending and collecting throughout all credit cycles. In addition, given our strong financial health, together with a low level of leverage, and the lowest cost of capital the group has ever had we believe implementing a buyback is the most appropriate capital management strategy at this time.

Money3 share price snapshot

It’s been a disappointing 12 months for Money3 shares, falling 22% in value.

The company’s share price has drifted even further during the course of 2022, down 32%.

Money3 commands a market capitalisation of about $513.03 million and has approximately 213.76 million shares on its registry.

The post This ASX All Ordinaries share just leapt 7% on a $15 million share buyback appeared first on The Motley Fool Australia.

More reading

• Why CSL, Dicker Data, Lifestyle Communities, and Money3 shares are rising today

Motley Fool contributor Aaron Teboneras 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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It’s been another rough and tumble kind of day for ASX shares. As it currently stands this Wednesday, the ASX 200 is pretty much flat after spending most of the day in the red so far.

This latest move puts the ASX 200’s losses over the past month alone at a painful 6% or so. So it might come as a surprise to some investors to hear that the Newcrest Mining Ltd (ASX: NCM) share price is also falling today. And by far more than the index too.

Newcrest shares are currently going for $24.86 each, down a nasty 0.84% so far today. Perhaps even more surprising is the fact that Newcrest has given up almost 11% over the past month, a significant underperformance of the ASX 200. I say surprising because gold, and gold miners like Newcrest by extension, have a well-developed reputation as ‘safe-haven’ assets. In other words, they are supposed to be counter-cyclical investments that protect an investor’s portfolio during times of fear.

Well, we are certainly in a fearful market right now. That’s just going off of the severity of the ASX 200’s losses over the past month. And yet Newcrest has been a drag on the ASX 200, rather than a saviour. What gives?

Why have gold miners like Newcrest been struggling?

Well, we only have to look at the gold price itself to understand why the Newcrest share price has been wobbly. A month ago, gold was being priced at around US$1,950 an ounce. In mid-April, the yellow metal even got close to US$2,000. But gold has slipped significantly since then. Today, it is only being priced at just under US$1,840 an ounce.

So has gold (and gold miners like Newcrest)’s role as a ‘safe haven’ now been debunked?

Not according to Chris Watling of Longview Economics. As we covered last month, Watling argued that it is the long term that investors should look to with gold. Here’s some of what he said:

We would argue, though, that gold has been remarkably resilient… While there’s strong evidence that gold is an inflation hedge over long periods of time, short-term price direction is determined by other factors…

Our central view is that it’s the latter, i.e. real yields, Fed rate expectations, and the dollar are likely to ‘top out’ and move lower in the near term (over the next few months). If that’s correct, then recent headwinds for the gold price should become tailwinds, with gold likely to break above its key resistance level [US$2,077 an ounce].

So perhaps it’s not a good idea to write gold, and gold miners, off just yet. But let’s wait and see how the precious metal fares over the rest of 2022.

The post If gold is regarded as a ‘safe-haven’ asset, why is the Newcrest share price still tumbling? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• Which ASX 200 mining shares were the worst-performing on Friday?
• 5 things to watch on the ASX 200 on Friday
• The ASX 200 shares that fund managers are buying and dumping
• Own Newcrest shares? Here’s how the share price performed in April

Motley Fool contributor Sebastian Bowen has positions in Newcrest Mining Limited. 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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The Altium Limited (ASX: ALU) share price has fallen 33% since the beginning of 2022. Could it now be good value?

For readers who haven’t heard of Altium, it’s a business that provides software tools for electronic [printed circuit board] PCB designers. As well as providing design tools, it also connects users with part suppliers and manufacturers to develop and manufacture electronic products faster and more efficiently. The company also offers cloud platform Altium 365, an electrical parts search engine Octopart, and several other services.

Altium’s positives

The ASX tech share has a number of stated points on its website that investors may want to know about.

Altium makes a couple of points regarding its research and development (R&D). It notes it has 35 years of continuous research and development in PCB design. It also expends all of its R&D costs in the year that it happens, rather than spreading that cost over a number of years to boost the net profit after tax (NPAT).

The company points out that it has globally diversified earnings. According to its website, its revenue is comprised of 49% from the Americas, 32% from Europe, 13% from emerging markets, and 6% from the Asia-Pacific region.

Altium notes that its revenue is underpinned by subscriptions. In the first half of FY22, recurring revenue was 74% of the total revenue, up from 65% one year earlier. It also said that its annual recurring revenue (ARR) rose by 43%. It’s expecting to reach 95% recurring revenue by 2025, excluding China.

Growth-focused

Altium says that it’s committed to pursuing dominance and transformation of the electronics industry. The company said:

We continue to increase Altium Designer seats by double-digit annual rates, seeking dominance for what is already the most widely-used professional PCB design tool on the planet. Bringing this customer base onto Altium 365, the world’s first digital platform for design and realisation of electronics hardware has the potential to transform the entire industry.

One of the goals of the company is the ‘rule of 50’. This is where the revenue growth rate (in percentage terms) plus the earnings before interest, tax, depreciation and amortisation (EBITDA) margin is at least 50%. Altium is committed to achieving double-digit revenue growth.

Other goals of the company for the middle of this decade are US$500 million of revenue and 100,000 subscribers.

Management believes the business is well-positioned for future growth. Altium said:

Electronics are the heart of intelligent systems and PCBs are central to the design and realization of electronics and smart connected products. Our tools and platform accelerate those innovation cycles and create digital continuity to connect industry value chains.

Is the Altium share price a buy?

The broker Citi is currently ‘neutral’ on the company, with a price target of $34. That implies a potential upside of more than 10% for Altium shares. It’s positive about the outlook for Octopart.

On Citi’s numbers, the Altium share price is valued at 49 times FY23’s estimated earnings.

The post Is the Altium share price now great value after dropping 30% in 2022? appeared first on The Motley Fool Australia.

More reading

• Why did the Xero share price just rebound 6%?
• Technophobia? Why ASX 200 tech shares are getting hammered again
• Here’s why ASX 200 tech shares are having such a disastrous run on Friday
• Down 30% in 2022, is the Altium share price now a buy?
• 2 excellent ASX shares to buy and hold for a decade

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Tristan Harrison has positions in Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium. 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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In late trade, the S&P/ASX 200 Index (ASX: XJO) has fought hard to get its head above water. At the time of writing, the benchmark index is up a fraction to 7,052.7 points.

Four ASX shares that are weighing on proceedings are listed below. Here’s why they are dropping:

GrainCorp Ltd (ASX: GNC)

The GrainCorp share price is down 2.5% to $10.29. This is despite the grain exporter releasing its half-year results and reporting record-breaking profits. GrainCorp reported a 49.9% increase in revenue to $3,842.1 million and a 200% jump in EBITDA to $427 million. However, it appears as though some investors were betting on the company upgrading its full-year guidance for a third time in as many months. Whereas management has only reaffirmed its most recent guidance.

Link Administration Holdings Ltd (ASX: LNK)

The Link share price is down almost 15% to $4.24. This appears to have been driven by concerns that the takeover of the administration services company by Dye & Durham could collapse. The scheme booklet reveals that Dye & Durham is taking out a loan that is more than three times its own market capitalisation to fund the deal.

National Australia Bank Ltd (ASX: NAB)

The NAB share price is down 4.5% to $30.33. A portion of this decline can be attributed to the banking giant’s shares trading ex-dividend this morning. Eligible shareholders can now look forward to receiving NAB’s fully franked 73 cents per share interim dividend in their bank accounts on 5 July.

Pendal Group Ltd (ASX: PDL)

The Pendal share price is down over 3% to $5.16. This morning a number of brokers responded to the fund manager’s half-year results. Two of those brokers, Credit Suisse and Morgan Stanley, downgraded the company’s shares to neutral ratings from the equivalent of buys. Both brokers were impressed with Pendal’s half-year result but feel the next 12 months could be tough.

The post Why GrainCorp, Link, NAB, and Pendal shares are sinking today appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Time is running out to secure dividends from these 3 ASX 200 shares
• The NAB share price is in reverse today. Here’s why
• The Link share price just tumbled 12% before being halted. What’s happening?
• ASX 200 midday update: Magellan names its new CEO, Link shares crash

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 positions in and has recommended Link Administration Holdings Ltd. 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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S&P/ASX 200 Index (ASX: XJO) energy shares took a big tumble in yesterday’s trading after both Brent crude and West Texas Intermediate crude oil prices fell by 1.2%.

Today, two of the three leading ASX 200 energy shares are also in the red.

The Woodside Petroleum Limited (ASX: WPL) share price is doing it the toughest, down 1.7% in afternoon trading.

Meanwhile, Santos Ltd (ASX: STO) shares have slipped 0.5%.

Only Beach Energy Ltd (ASX: BPT) is bucking the trend, with shares up 1.7% to $1.64.

What’s been impacting ASX 200 energy shares?

Many factors come into play to determine an individual company’s share price. But when it comes to the ASX 200 energy shares named above, the price of the oil and gas they pump from the Earth is a core factor.

At the time of writing, one barrel of Brent crude is trading for US$104.34. That’s up 1.8% over the past 24 hours, with WTI posting similar gains. This could help explain the bounce in the Beach Energy share price today.

However, all the ASX 200 energy shares are facing significantly lower prices for their product than just a few days ago. On Friday Brent was still fetching US$112.39 per barrel. A little back of the napkin maths tells us that despite the overnight bump, Brent crude prices are down 7.2% since then.

What’s happening in oil markets?

Commenting on the current fate of oil companies, Warren Patterson, head of ING commodities research said (quoted by Reuters), “China’s COVID situation, rising rates and growing recession risks are not helping risk assets.”

Fawad Razaqzada, a market analyst with City Index and FOREX.com believes we may have seen the top of the energy price spike.

According to Razaqzada (courtesy of Bloomberg), “Crude oil may have finally topped out. I know that is a brave call to make and shorting oil is playing with fire given geopolitical risks.”

There are countless moving parts to analyse when trying to gauge the direction of oil and gas prices, which will either help or hinder the bottom line of ASX 200 energy shares.

One market to keep a close eye on is the United States. The world’s biggest economy isn’t only the world’s biggest consumer of crude oil, it also counts among its top three producers alongside Saudi Arabia and, yes, Russia.

With that in mind, crude prices could fall if the US enters a recession, as some economists fear. If the US economy contracts, the nation’s demand for energy will follow suit.

On the flip side, crude prices could go higher if US production fails to meet demand. On that front, the US Energy and Information Administration (IEA) just scaled back its forecast for US oil production in 2022 to 11.9 million barrels per day (mbpd) from 12.01 mbpd.

Still, even if the IEA’s new forecast is correct, that’s still a sizeable boost from the 11.2 mbpd the US produced in 2021.

After a stellar run so far in 2022, investors in ASX 200 energy shares will be watching these developments closely.

How have these ASX 200 energy shares been tracking?

2022 has been a great year to hold the ASX 200 energy shares discussed above.

Since the opening bell on 4 January, the Santos share price is up 19.8%; the Beach Energy share price is up 25%; and the Woodside share price has gained a whopping 33.5%.

This as the ASX 200 itself has lost 7.2% year-to-date.

The post What’s happening with ASX 200 energy shares this week? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Analyst tips Santos share price to surge higher
• 5 things to watch on the ASX 200 on Tuesday
• Do Beach Energy shares pay dividends?
• Why is the Woodside share price beating the ASX 200 on Monday?

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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The Bank of Queensland Ltd (ASX: BOQ) share price has struggled in 2022 and is now 8% lower this year to date.

After a rocky period, Bank of Queensland shares slipped from their former high of $8.68 at the end of March and are now trading at $7.42 each at the time of writing. That’s a new 52-week low.

Are brokers bullish on the BOQ share price?

Analysts at JP Morgan have scaled back their outlook on Bank of Queensland shares in a recent note to clients.

The broker said:

BOQ’s 1H FY22 underlying result was softer than expected, driven by lower [net interest margin] NIM and average balances, while non-interest income one-offs and provision write-backs boosted the reported numbers.

The NIM headwind from asset pricing and mix was alarming at -16bps and while this should ease in 2H, it is indicative of an ultra-competitive home loan market as well as raising questions about BOQ’s view that it is driving ‘quality growth’.

Capping off its assessment, the broker remarked that BOQ “remains a work-in-progress, offers little leverage to rising rates, and is most exposed to likely deterioration in [term deposit] TD spreads”. It’s hardly an upbeat view.

Meanwhile, banking industry analysts at Bloomberg Intelligence are equally as downbeat on the bank’s growth prospects.

Analysts Matt Ingram and Jack Baxter wrote:

Bank of Queensland’s 8% [return on equity] ROE may continue to remain below those of Australia’s big banks due to clients’ low fee trend and its exit from insurance, but margin tailwinds from 2H rising RBA cash rates could help offset.

“[The bank’s] 8% ROE may stay below peers’ 10% average as it could struggle to lift revenue-to-assets of 1.4% up to peers’ 2.3%, given the trend to low/no fee products and its underweight to credit cards.

Meanwhile, as TMF reported yesterday, analysts at Morgans hold the opposite view, noting they see “exceptional value in Bank of Queensland’s stock”.

Unlike its peers, the broker doesn’t expect BOQ’s NIM to come in any worse than the “industry-wide trend”.

Not only that, but “cost synergies associated with the ME Bank acquisition are being realised at a faster rate than originally anticipated”, according to Morgans.

It values BOQ at $11 per share on a buy rating, whereas JP Morgan rates it a hold at an $8.30 per share valuation.

The pair are joined by eight other analysts advocating to buy and six saying to hold at this point in time, according to Bloomberg data.

The consensus price target from this group is $9.18, suggesting an approximate 24% upside from the current share price.

In the last 12 months, the BOQ share price has crept down 17% into the red and is down 8% this year to date.

The post Is there upside in the Bank of Queensland share price in May? appeared first on The Motley Fool Australia.

More reading

• Analysts name 2 ASX dividend shares to buy with growing yields
• What is the current dividend yield on Bank of Queensland shares?
• Why is the Bank of Queensland share price slipping again on Thursday?
• Why is the Bank of Queensland share price sliding today?
• Why did the Bank of Queensland share price tank 7% in April?

Motley Fool contributor Zach Bristow 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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Once again, the S&P/ASX 200 Index (ASX: XJO) is enduring a red day of trading so far this Wednesday. At the time of writing, the ASX 200 has lost another 0.1% and is back to just over 7,040 points after another incursion below 7,000 this morning. 

But rather than letting these latest market moves get to us, let’s instead take a glance at the ASX 200 shares that are currently at the top of the share market’s trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Wednesday

South32 Ltd (ASX: S32)

Diversified ASX 200 mining share South32 is the first company worth checking out today. This miner has had a hefty 12.54 million of its shares swap owners so far this Wednesday.

With no news out from the company, we have to assume this volume is the result of South32’s ongoing share buybacks, as well as the noticeable share price drop we have seen so far today. At the current time, South32 has lost 2.13% and is down to $4.38 a share.

Telstra Corporation Ltd (ASX: TLS)

ASX 200 telco Telstra is our next share on our list today. A sizeable 17.62 million Telstra shares have traded hands as it currently stands. Here it seems we have a very similar situation to South32. No news out from the company, save for share buyback notices, which could well be involved in the high volumes we are seeing.

Telstra shares have also copped a small beating today. The telecommunications giant has presently lost 0.9% of its value and is back to $3.90 a share. So we can probably thank this combination for Telstra’s presence today.

Link Administration Holdings Ltd (ASX: LNK)

Our final and most traded ASX 200 share today goes to financial services provider Link Administration. Link has had a whopping 42.55 million shares bought and sold this Wednesday thus far. That’s despite Link shares being placed in a trading halt for a few hours today.

As we covered earlier today, Link shares plunged more than 12% before the company requested the halt, which has since been lifted. As it currently stands, Link remains down 12.47% at $4.35 a share. It’s this drama that is almost certainly behind Link’s elevated volumes.

The post Here are the 3 most heavily traded ASX 200 shares on Wednesday appeared first on The Motley Fool Australia.

More reading

• Why is the Fortescue share price rebounding today?
• Do Coles shares offer a dividend reinvestment plan?
• The Link share price just tumbled 12% before being halted. What’s happening?
• ASX 200 midday update: Magellan names its new CEO, Link shares crash
• Is the Telstra share price a safe haven buy right now?

Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Link Administration Holdings Ltd. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited. 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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The Flight Centre Travel Group Ltd (ASX: FLT) share price is having another off day on Wednesday.

In afternoon trade, the travel agent giant’s shares are down 2.5% to $19.80.

This means the Flight Centre share price is now down 12% since the start of May.

Is the Flight Centre share price in the buy zone?

Given the recent weakness in the Flight Centre share price, some investors may be wondering if a buying opportunity has been created.

Well, the good news is that the team at Bell Potter appear to believe that is the case.

According to a note, the broker has retained its buy rating and lifted its price target by almost 20% to $24.50.

Based on the current Flight Centre share price, this implies potential upside of 24% for investors over the next 12 months.

What did the broker say?

Bell Potter was pleased with Flight Centre’s recent third-quarter update, noting that the company returned to operating profit during the month of March.

It said:

FLT released a solid 3Q22e trading update, with the Group returning to breakeven as travel recovers in key markets and FLT increases market share. Underlying EBITDA was $8m in the month of March, with the Corporate business profitable at EBITDA and PBT, and Leisure approaching EBITDA breakeven (targeted for 4Q22e).

Looking ahead, the broker believes that the growth of Flight Centre’s corporate business and a more profitable leisure business could have positioned the company to surpass its pre-COVID profits in FY 2024.

Based on this, it believes the Flight Centre share price is attractively priced at the current level.

The broker explained:

We see scope for FLT to surpass pre-COVID NPAT levels by FY24e, driven by organic growth in the Corporate business and a more profitable Leisure business post-restructure, which could see a consensus upgrade cycle. Our 12-month Price Target implies a FY24e P/E multiple of 17.9x, which we believe is justified.

The post Broker says Flight Centre share price could takeoff and rise 24% appeared first on The Motley Fool Australia.

More reading

• When was the best ever day on the Flight Centre share price chart?
• Unprecedented: Does this event mean we’re now in a bear market?
• Leading brokers name 3 ASX shares to buy today
• Are ASX 200 travel shares already fully valued in May?
• These are the 10 most shorted ASX shares

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 Limited. 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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