The Webjet Limited (ASX: WEB) share price has been out of form over the last four weeks.
Since this time on 18 March, the online travel agent's shares have fallen approximately 15%.
This has been driven by concerns over the vaccine rollout and its decision to raise more funds last week.
Is this a buying opportunity?
According to a note out of Goldman Sachs this morning, its analysts believe the recent weakness in the Webjet share price is a buying opportunity.
Although the broker has downgraded its earnings forecasts to reflect its convertible notes offering, it has retained the buy rating and $7.00 price target it has on its shares.
Based on the current Webjet share price of $5.31, this implies potential upside of almost 32% over the next 12 months.
What did Goldman say?
Goldman commented on its capital raising. It said: "We view this announcement as a move towards removing capital structure uncertainty. While the new convertible notes are likely to be dilutive to equity shareholders in the future (considering our WEB target price), they are currently out of the money with par value 20.3% above the current share price."
"In the interim, the announcement further lengthens debt maturity, removes the P&L impact from mark to market of the convertible option revaluation and lowers the interest cost on debt. While not a key factor in our base recovery scenario, we believe that these factors ease uncertainty in the bear case recovery scenario."
Is the Webjet share price good value?
Goldman Sachs currently estimates that the Webjet share price is trading at a lofty 117x estimated FY 2022 earnings.
While this is very excessive, it quickly normalises in FY 2023 when trading conditions are expected to be back to normal.
Based on its earnings per share estimate of 21 cents per share in FY 2023, Webjet's shares are trading at a more reasonable 25.5x estimated FY 2023 earnings.
This could make it worth considering for investors that are willing to make a patient investment.
