The Webjet Limited (ASX: WEB) share price has outperformed over the last few months — could the travel stock still have more room to fly?
The S&P/ASX 200 Index (ASX: XJO) travel giant posted a return to profit in November following its dire earnings tumble amid the COVID-19 pandemic.
However, the Webjet share price is still more than 35% lower than it was in February 2020. Right now, the stock is swapping hands for $6.29 apiece.
Could it keep covering ground towards its pre-pandemic highs in the new year and beyond? Here's what experts think about buying the travel stock this holiday season.
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Are Webjet shares a buy this holiday season?
Could Webjet shares be a buy this Christmas? Blackmore Capital chief investment officer Marcus Bogdan believes so.
The expert likes the company's recently revealed revenue and earnings, as well as its balance sheet and potential to capitalise on the travel sector's recovery, as per Livewire. Bogdan continued:
I think that recovery will persist for the foreseeable future.
The online travel agent posted $175.7 million of revenue for the first half of financial year 2023 – a whopping 217% year-on-year improvement. It was an even better turn-around for its underlying earnings before interest, tax, depreciation, and amortisation (EBTIDA), which grew 557% to reach $72.5 million.
Bogdan is far from alone in his bullish view on the Webjet share price.
Morgans senior analyst Belinda Moore recently hailed Webjet as "a stronger business coming out of COVID", noting its "management hasn't wasted a crisis". The broker tips the stock to post $120 million of full-year EBITDA.
Goldman Sachs is also hopeful, tipping Webjet shares as a conviction buy and slapping them with a $6.90 price target.
However, not all experts are so hopeful. Firetrail Investments deputy managing director and portfolio manager Blake Henricks believes the stock is a hold, saying, courtesy of Livewire:
The thing I like about Webjet is that it has pivoted more to that [business-to-business] side and so those earnings are going to be more robust with higher margins. We look out a couple of years and we say it's probably on a low 20s [price-to-earnings].
I think that's okay, but it's had a very good run. What we've seen in many categories is, as they rise, they tend to then moderate.
Right now, the Webjet share price is 16% higher than it was at the start of 2022. It's also 18% higher than it was this time last year.
