The Corporate Travel Management Ltd (ASX: CTD) share price has been a very strong performer on the S&P/ASX 200 Index (ASX: XJO) on Thursday.
In afternoon trade the corporate travel specialist's shares are up 6.5% to $9.13. At one stage they were up over 7.5% to $9.21.
Despite this, the Corporate Travel Management share price is down over 60% from its 52-week high.
Why is the Corporate Travel Management share price storming higher?
There appears to be a couple of catalysts for today's strong gains.
The first is general buying in the travel sector today. As well as Corporate Travel Management, the likes of Flight Centre Travel Group Ltd (ASX: FLT), Helloworld Travel Ltd (ASX: HLO), and Webjet Limited (ASX: WEB) are all trading notably higher this afternoon.
This may be a sign that some investors believe their shares have been oversold in recent months and are now trading at very attractive levels.
One broker that believes Corporate Travel Management shares are a bargain buy is Morgans. I suspect a note out of the broker on Wednesday could be another catalyst for today's gains.
What did Morgans say?
According to the note, the broker has upgraded the company's shares to an add rating with a $12.85 price target. This price target implies potential upside of ~40% over the next 12 months.
Morgans made the move partly on valuation grounds after its share price fell materially lower than its valuation.
In addition to this, the broker's industry research indicates that corporate travel markets have been stronger than expected recently. It believes this could mean that Corporate Travel Management surprises to the upside in FY 2021. Especially if it can win market share from its weakened competitors.
Another positive, according to Morgans, is the company's liquidity. It estimates that Corporate Travel Management has sufficient liquidity to last it until the end of FY 2022.
Should you invest?
While I do think Morgans makes some great points and feel Corporate Travel Management's shares look good value, I would prefer to wait until the crisis passes before investing in the travel sector.
