Macquarie has surveyed 40 travel agents, airlines and hotel operators to gauge recent travel trends. The consensus view is that conditions are subdued for both domestic and international travel. Global political uncertainty and corporates mandating travel freezes of varying degrees are having an impact.
Price deflation amongst hotel operators and airlines globally has persisted, dampening any rebound in volume. Macquarie believes, despite valuation support, structural and cyclical issues continue to weigh on Flight Centre and expectations of a recovery in FY20 are optimistic.
Neutral maintained. Target rises to $43.70 from $37.60 as the model is rolled forward.
Sector: Consumer Services.
Target price is $43.70.Current Price is $43.25. Difference: $0.45 – (brackets indicate current price is over target). If FLT meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges – negative figures indicate an expected loss).