The Webjet Limited (ASX: WEB) share price has been a poor performer this week.
Since the start of the week, the online travel agent's shares have fallen a disappointing 11%.
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Why is the Webjet share price sinking this week?
The decline in the Webjet share price appears to have been driven by the release of an update out of one of its competitors.
Earlier this week, Flight Centre Travel Group Ltd (ASX: FLT) released a trading update and revealed that it expects to post a second half loss in line with the one it recorded during the first half of ~$250 million. This was materially more than the market was expecting.
In addition to this, concerns about rising COVID-19 cases across the world appears to be weighing on sentiment in the travel sector.
Is this a buying opportunity?
According to a note out of Goldman Sachs, this could be a buying opportunity for investors.
This morning the broker retained its buy rating and $7.00 price target on the company's shares.
Based on the current Webjet share price, this represents potential upside of 57% over the next 12 months.
What did the broker say?
Goldman commented: "Since we initiated on FLT and WEB in March, there has been 33.7mn new cases of COVID reported across the world driven by a new wave in India. However, on the flipside, vaccination progress has been encouraging, especially in the USA and UK with an estimated 63% and 61% of the population achieving immunity (vaccination or prior infection) as of early May 2021."
"Overall, the travel recovery is tracking in line with expectations albeit with interim declines (Feb) and strong recoveries (Mar). The December 2019 indexed activity tracker, based on monthly IATA data, for domestic Australian airline travel suggests that activity has improved to 53.6 in March 2021 vs. 35.9 in Dec 2020. We expect activity in April to have been in line with March but recovery signs leading into the Northern Hemisphere summer period, a key holiday travel period, looks encouraging. We make no changes to our travel activity forecasts for FLT and WEB."
In light of this, the broker continues to believe that Webjet is well-placed to return to growth in the not so distant future as the travel market recovers.
