Will TUI need a summer holiday following next Thursday’s third quarter results?
After a false start, with the stock spiking to £16.50 towards the end of January, only to get trapped under £15.50 for much of the first quarter, things picked up quite nicely for TUI in early April. There the company kicked-off a run of form that took it all the way to an all-time high of £18.18 by 18th May.
Since then, however, the stock hasn’t been so successful, quite sharply pulling back from that peak, with TUI AG now at a current trading price, and 15 week low, of £15.69.
The firm’s last update came on May 9th, when it unveiled its half year figures. Group revenue was up 8.5% to €6.8 billion at a constant currency basis, with a rebound in the recently ‘subdued’ Turkey and North Africa markets, alongside strong demand from UK holidaymakers and the success of its expanding cruises division, helping sales.
The latter especially was a boost to the firm’s earnings performance; underlying EBITA in cruises jumped 23.2%, with a 32.4% rise at Holiday Experiences and a 46% leap at Hotels & Resorts allowing TUI to trim its losses from €229.6 million to €158.6 million.
Heading into Thursday’s Q3 update, the worry is that the World Cup, and the European heatwave, will have had a negative impact on demand for the remaining unsold summer package holidays. Investors will be on the lookout for any revisions to guidance if, as reports in July suggest, that has been the case, with TUI stating back in May its looking for a 3% rise in turnover and at least 10% growth in underlying earnings for the full year.
Tui AG (LON:TUIT) has a consensus rating of ‘Buy’ alongside an average target price of £16.55.
Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.
In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved.