One of the best performers on the Australian share market on Thursday has been the Webjet Limited (ASX: WEB) share price.
At one stage the online travel agent's shares were trading at an all-time high of $13.72. They have since given back some of these gains, but still sit 4.5% higher at $13.64.
Why did Webjet's shares hit an all-time high?
With no news out of the company, today's gain is likely to be in relation to an upbeat broker note out of Morgan Stanley this morning.
Although the broker has only upgraded Webjet's shares to an equal-weight (hold) rating with a $12.60 price target, the removal of the underweight (sell) rating appears to have gone down well with the market.
According to the note, the broker has made the move on the belief that positive global hotel trade is providing Webjet's business to business segment with strong tailwinds.
While Morgan Stanley still has concerns over its weak cash conversion and structural challenges, it isn't enough to prevent an upgrade to its rating and price target.
Should you invest?
Despite Webjet's shares racing to an all-time high today they still only trade at a reasonably respectable 22x estimated FY 2019 earnings, based on Morgan Stanley's forecasts.
I think this is a fair price to pay for a company benefiting greatly from the shift to online booking and the inbound and outbound tourism boom that Australia continues to experience.
In light of this, I would suggest that investors consider picking up shares in Webjet with a long-term and patient view.
Further, although the whole travel industry is well-positioned for growth, my preference remains Webjet ahead of industry peers Flight Centre Travel Group Ltd (ASX: FLT) and Corporate Travel Management Ltd (ASX: CTD) largely on valuation grounds.
