The Flight Centre Travel Group Ltd (ASX: FLT) share price has slipped just 0.05% to $18.22 after touching an intraday high of $18.52 in early afternoon trading.
This represents an increase of around 20% over the past month.
So, what's going on here?
Image source: Getty Images
What's pushing the Flight Centre share price skywards?
The main factor is the $211 million purchase of United Kingdom-based luxury travel brand, Scott Dunn.
Flight Centre entered a trading halt when it announced the acquisition on 31 January.
Investors responded enthusiastically with a 15% bump to the Flight Centre share price when trading resumed the next day.
The company conducted a $180 million institutional capital raise to help fund the purchase.
A $40 million share purchase plan (SPP) for ordinary ASX investors is now open til 6 March.
The SPP shares will be issued at an offer price that is the lower of either $14.60 (the same as the institutional offer price) or a 2% discount to the volume weighted average price of Flight Centre shares traded over the five trading days up to, and including, the SPP closing date).
What else is going on?
The Scott Dunn deal was the only price-sensitive news that Flight Centre announced during the month. So, most of Flight Centre's share price growth over the period can be attributed to that.
But positive broker notes certainly help, and as my colleague James reported on Wednesday, top broker Macquarie is positive on the ASX travel stock.
Macquarie has increased its rating on Flight Centre to outperform with a share price target of $20.75. So, there's a 14% upside to be had over the next 12 months for new investors buying today.
There is also anticipation regarding Flight Centre's 1H FY23 results, which will be released on 22 February.
In an investor presentation relating to the Scott Dunn deal, Flight Centre said preliminary unaudited accounts indicated the company would beat its guidance for underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) in the first half.
Flight Centre is expecting to report an underlying EBITDA of $95 million for 1H FY23. This is beyond its initial market guidance range of $70 million to $90 million.
Fellow ASX travel shares hitting 52-week highs in 2023
Also boding well for the Flight Centre share price, two fellow ASX travel shares recorded new annual highs over the past month.
Webjet Limited (ASX: WEB) hit its highest share price since the onset of COVID-19 at $7 per share on 1 February.
Qantas Airways Limited (ASX: QAN) hit a new 52-week high of $6.69 on 18 January.
