On Monday, Jefferies began coverage on Webjet Limited (WEB:AU) (OTC: WEBJF) shares, an Australian online travel agency, with a Hold rating and a price target of AUD0.95. The firm highlighted that Webjet, which has an approximately 8% share of Australian flight bookings, is now demerged and possesses net cash, potentially freeing it from previous strategic constraints.
The analysis by Jefferies points out that while the leisure travel recovery in Australia and New Zealand (ANZ) is complete, global online travel agencies (OTAs) like Booking Holdings (NASDAQ:BKNG), Expedia Group (NASDAQ:EXPE), and Trip.com (TCOM) are positioned to increase market share. Webjet competes directly with these global majors, as well as Flight Centre Travel Group (FLT), a dominant Australian hybrid travel agent.
Jefferies' coverage notes that despite Webjet's strong positioning, the valuation remains a factor that keeps the firm on the sidelines.
The mention of Webjet as a potential merger and acquisition (M&A) target suggests that the company could be attractive to larger entities looking to expand their presence in the ANZ market. However, the current price target reflects a cautious approach to Webjet's stock valuation.
Investors and market watchers will likely monitor Webjet's performance and positioning closely in the competitive online travel agency sector, especially in the context of potential M&A activity. The Hold rating indicates that Jefferies sees the company as fairly valued at the current price point.
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