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TUI share price: Analysts impressed by group’s profits

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Analysts at Interactive Investor argue that TUI Group’s (LON:TUI) profits are still leaving peers in the dust, despite a fall in the FTSE 100 group’s shares since May, Citywire reports. The comments came after the blue-chip tour operator updated investors on its recent performance yesterday, saying that it expects to deliver a fourth consecutive year of double-digit earnings growth, despite this year’s  hot weather spell.

TUI’s share price surged in the previous session, as investors welcomed the company’s update, adding 2.50 percent to close at 1,474.00p. The stock outperformed the broader UK market, even as the benchmark FTSE 100 index gained 33.95 points to close 0.45 percent higher at 7,545.44, helped by weakness in the pound.

Interactive Investor impressed

Citywire quoted Interactive Investor analyst Lee Wild as commenting that while TUI’s shares were dragged down by the hot weather over the summer and increased discounting, fears that the group will follow Thomas Cook into a profit warning were ‘misplaced’.

“TUI doesn’t expect any surprises for the rest of 2018, which should mean a fourth consecutive year of double-digit growth in underlying profit,” the analyst pointed out, adding that that was “significant and the kind of growth that Thomas Cook can only dream of”.

TUI, however, warned yesterday that it was expecting a €70-million hit from  foreign exchange translation on the FY18 underlying EBITA result, following the further weakening of the Turkish lira since the group’s third-quarter update.

Other analysts on TUI Group

Shore Capital reaffirmed its ‘buy’ rating on TUI in the wake of the tour operator’s results yesterday, without specifying a valuation on the shares. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average price target of 1,714.17p.

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