TUI share price boosted by rival collapse ahead of update

TUI Group’s (LON:TUI) share price has surged in London this Monday, boosted by the collapse of smaller London-listed rival Thomas Cook (LON:TCG). The move higher comes as the FTSE 100 tour operator prepares to update investors on its performance tomorrow.

As of 13:52 BST, TUI’s share price had added 7.51 percent to 903.77p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.20 percent lower at 7,330.40 points. The tour operator’s shares have given up more than 36 percent of their value over the past year, as compared with about a 2.2-percent fall in the Footsie.

TUI reports tomorrow

TUI is scheduled to update investors on its trading tomorrow, and ShareCast reports that in a preview written before Thomas Cook went under, UBS had said that it expects the FTSE 100 company to announce that its financial year was closing out in line with expectations.

“In terms of current trading we note the company has previously flagged strong summer bookings (+7%) with positive pricing in August in both UK and Europe while the early signs for the winter schedules in the UK were showing some customer hesitancy,” the broker elaborated, adding, however, that it was unclear to it “how much of the strong August bookings were driven by a market recovery (on easy comps last year) versus market share gains versus Thomas Cook”.

The update will come after TUI said last month that it had seen a fall in profits for the third quarter of its financial year, having suffered from the grounding of Boeing’s 737 MAX aircraft.

Analyst ratings update

Morgan Stanley reaffirmed its ‘overweight’ stance on the blue-chip tour operator this month, without specifying a target on the TUI share price. According to MarketBeat, the blue-chip group currently has a consensus ‘hold’ rating and an average valuation of 989p.