The Flight Centre Travel Group Ltd (ASX: FLT) share price is on course to finish the week with a day in the red.
In late morning trade the travel agent's shares are down almost 1% to $65.40.
Unfortunately for shareholders, one leading broker is tipping more declines to come.
According to a note out of Citi, its analysts have downgraded Flight Centre's shares to a sell rating from neutral.
The broker has, however, raised its price target to $59.00. But this price target still implies potential downside of almost 10% for its shares.
Citi has made the move after Flight Centre's shares rose a massive 40% over the last 12 months on the back of improved trading conditions and higher airfares.
The broker believes the market has begun to price in a fair bit of future growth which is far from guaranteed. Successful cost cutting could help, but the broker clearly doesn't see it being enough.
This is a similar view to analysts from Morgans who recently rated Flight Centre as a hold with a $61.70 price target.
That note revealed that its analysts felt the market had priced in an earnings upgrade at its FY 2018 results. Morgans doesn't appear convinced by this and suggested that it would have already been announced.
Should you sell?
I think Flight Centre's shares are looking reasonably expensive now for its current growth profile. So after such a stellar run over the last 12 months, I feel it could be a good idea to take a little bit of profit off the table.
Instead, I would be looking at industry peers Corporate Travel Management Ltd (ASX: CTD), Helloworld Travel Ltd (ASX: HLO), and Webjet Limited (ASX: WEB). I think all three of these companies are trading on reasonably fair valuations given their respective growth outlooks.
