Menu
Equities Transport and Tourism UK

TUI share price surges despite hit to profits

Share this article!

TUI Group’s (LON:TUI) share price has surged in London this morning even as the blue-chip tour operator posted a fall in profits for the third quarter of its financial year, having suffered from the grounding of Boeing’s 737 MAX aircraft. The company, however, reaffirmed its full-year expectations.

As of 09:01 BST, TUI’s share price had added 3.06 percent to 835.38p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.29 percent lower at 7,206.11 points. The group’s shares have given up more than 45 percent of their value over the past year, as compared with about a 5.6-percent fall in the Footsie.

TUI posts third-quarter results

TUI announced in a statement this morning that turnover had climbed 2.8 percent higher to €4.75 billion in the third quarter of its financial year. The group’s underlying EBIDTA, however, tumbled 54.6 percent to €219.3 million.

The company explained that its Markets & Airlines business continued to see a weak demand environment, reflecting the ongoing knock-on impact of the last summer’s heatwave and Brexit uncertainty. The third quarter was further impacted by the 737 MAX aircraft grounding, and TUI said that it anticipates related costs of about up to €300 million for the current financial year.

The blue-chip group, however, reaffirmed its full-year EBIDTA guidance of about up to -26 percent compared with underlying EBITA rebased in FY18 of €1.18 billion. The company further said that it had inked a deal related to the disposal of two non-core German specialist businesses, for an agreed enterprise value of between €96 million and €106 million.

Analysts on blue-chip company

Shore Capital reaffirmed the FTSE 100 tour operator as a ‘buy’ today, without specifying a target on the TUI share price. According to MarketBeat, the blue-chip company currently has a consensus ‘hold’ rating and an average valuation of 989p.

Add Comment

Investing is speculative. When investing your capital is at risk. This site is not intended for use in jurisdictions in which the trading or investments described are prohibited and should only be used by such persons and in such ways as are legally permitted. Your investment may not qualify for investor protection in your country or state of residence, so please conduct your own due diligence. This website is free for you to use but we may receive commission from the companies we feature on this site. Click here for more information.