Goldman says Webjet (ASX:WEB) share price is a buy with 25% upside

Time to buy Webjet shares? This broker thinks it is…

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The Webjet Limited (ASX: WEB) share price has come under significant pressure again in recent weeks.

So much so, the online travel agent's shares have lost 16% of their value since this time last month.

This has been driven partly by concerns that the Omicron variant of COVID-19 could derail the travel market.

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Image source: Getty Images

Is the Webjet share price good value now?

While the weakness in the Webjet share price has been disappointing for shareholders, the analysts at Goldman Sachs appear to believe it could be a buying opportunity.

According to a note out of the investment bank, the broker has retained its buy rating but trimmed its price target slightly to $6.90.

Based on the current Webjet share price of $5.52, this suggests there is potential upside of 25% for investors.

What did the broker say?

Goldman was reasonably pleased with the company's recent half year results release.

It commented: "The 1H22 results for WEB was slightly below GSe at the EBITDA level but positive in terms of cash generation and a few other qualitative markers that we look at as important for WEB through the recovery, including the Americas region."

Looking ahead, the broker doesn't appear concerned by the Omicron variant at this stage.

Its analysts explained: "We note that the Omicron variant has resulted in some border restrictions being reintroduced globally. However, given the limited exposure for WEB towards the Southern African regions, we make no changes to our estimates on this basis."

In light of this, its analysts remain very positive on Webjet's long term outlook and continue to see it as a reopening winner.

Goldman concluded: "Overall, WEB continues to make progress in the right direction through the reopening with the 20% cost savings target remaining intact for the Webbeds division. We continue to see a long term growth story in this business and view WEB as net beneficiaries of the post COVID recovery. We slightly lower our 12m Target Price to A$6.90 (vs. A$7.00 prior) and maintain our Buy rating on WEB."

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 Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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