TUI Group’s (LON:TUI) share price soared in London in the previous session, benefitting from comments at Stifel which resumed coverage of the company with a ‘buy’ rating. The move comes ahead of the company’s third-quarter results on August 13.
TUI’s share price soared in London in the previous session, gaining 4.60 percent to close at 841.00p, outperforming the broader UK market, with the benchmark FTSE 100 index adding 6.23 points to end trading 0.08 percent higher at 7,514.93. The group’s shares have given up more than 48 percent of their value over the past year, as compared with about a two-percent fall in the Footsie.
Stifel upbeat on TUI Group
Stifel resumed coverage of TUI with a ‘buy’ rating yesterday, with a price target of 940p. Sharecast quoted the broker as commenting that the strong market reaction to the company’s aborted profit guidance has left the shares looking oversold, with free cash flow inflection underpinning a nine-percent dividend yield and sum-of-the-parts valuation support.
“Near term focus will be on the second-half profit recovery, which still carries risks, reflecting a challenging backdrop for the industry,” the broker pointed out, adding that the tour operator’s “vertically integrated business model leaves it well placed to adapt to industry change and possible consolidation, as peak capex gives way to a third wave of tech-led initiatives”.
Other analysts on tour operator
UBS reaffirmed the company as a ‘sell’ yesterday, without specifying a target on the TUI share price, while earlier this month, Jefferies initiated coverage of the stock with an ‘underperform’ rating. According to MarketBeat, the blue-chip group currently has a consensus ‘hold’ rating and an average valuation of 989p.
TUI reported in February that its net loss had widened to €111.9 million in the quarter ended December 31, 2018, from €68.3 million in the prior-year period.
Tsveta van Son is part of Invezz’s journalist team. She has a BA degree in European Studies and a MA degree in Nordic Studies from Sofia University and has also attended the University of Iceland. While she covers a variety of investment news, she is particularly interested in developments in the field of renewable energy.