The best Australian travel shares such as Flight Centre Travel Group Ltd (ASX: FLT), Webjet Limited (ASX: WEB), Helloworld Ltd (ASX: HLO) and Corporate Travel Management Ltd (ASX: CTD) have been under pressure recently for differing reasons, but Flight Centre shares could have some upside if the analysts at Citi are on the money.
News wires are reporting that Citi's tipping the Flight Centre share price as a buy at $43.40 after the shares lost around 33% over the past 12 months partly on the back of an April 2019 downgrade to full year profit guidance.
Flight Centre now expects full year profit before tax between $335 million to $360 million, which is a fair way lower than the original guidance between $390 million to $420 million.
Flight Centre blamed the downgrade on Australia's weaker domestic economy paring back leisure and business travel demand, with the same problem affecting Brexit-stranded Britain.
It's not hard to see why Flight Centre might be liked by Citi as based on a 101 million shares on issue it has a market value of $4.38 billion, which is just 12.6x the mid-point of its net profit forecast. Moreover, it has an extremely strong balance sheet with just $35.8 million in debt and $394 million cash on hand.
It also has a long-term track record of growth and is founder led to mean it ticks the boxes for further research.
