Why the Webjet Limited share price has hit turbulence

Webjet Limited (ASX:WEB) shares were up 3.6% supported by a strong earnings outlook. 

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A few days ago Webjet Limited (ASX: WEB) announced that Bloomberg incorrectly reported a softening of the FY18 guidance that the company provided on 22 February 2018.

Webjet was up 3.6% to $11.1o on Tuesday. The company is not a dividend play paying a trailing yield of 1.7% per annum (pa), trading on a forward PE ratio of 28.8 based on JB Were's EPS forecast of $0.40 cents.

Webjet Limited's 1H18 has gone according to plan with net profit after tax up 25%.

Flight bookings and WebBeds are driving growth. A range of higher revenue margin anxillary products offered by the company including hotels, car hire, travel insurance, cruise, motorhomes and packages are growing in aggregate faster than flights.

Bapcor Ltd (ASX: BAP) is in the same sector as Webjet, but is focused on the distribution of automotive aftermarket parts. Recently, Morgan Stanley its overweight rating and $7.00 price target on Bapcor's shares. Earnings per share is expected to be 31 cents a share in FY18, rising to 36 cents per share in FY19. One year performance is up 9% to $5.80 trading on a forward PE ratio of 16x FY19 earnings.

Motley Fool contributor Rosemary Steinfort has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Webjet Ltd and owns shares in Bapcor Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »