The Webjet Limited (ASX: WEB) share price has been a strong performer over the last 12 months.
Since this time in 2020, the online travel agent's shares have risen a sizeable 48%.
This is despite the Webjet share price trading 13% lower than its March high.
Can the Webjet share price keep rising?
The good news is that the team at Goldman Sachs still sees a lot of value in the Webjet share price.
According to a recent note, the broker has retained its buy rating and $6.40 price target on its shares.
Based on the current Webjet share price of $5.50, this implies potential upside of 16% over the next 12 months.
What did the broker say?
Goldman Sachs has amended its earnings estimates to reflect the current outbreak of COVID-19 across Australia.
While this has resulted in some sizeable downgrades in the near term, the broker remains very positive on its longer term outlook.
Its analysts commented: "While short term headwinds persist, we note that our Buy thesis on Webjet remains based on the longer term positives of its exposure to a subsegment within travel which is likely to benefit beyond the recovery from the pandemic and improved operating margins."
"We see no changes to this outlook. In the meanwhile, we note that the balance sheet remains strong following the issue of convertible notes in April and we expect the group to maintain a net cash position despite the short term headwinds," it added.
What about its valuation?
Although Goldman notes that the Webjet share price looks expensive based on current multiples, it highlights that its valuation looks much more reasonable on longer term forecasts.
It explained: "Valuation stretched on short term earnings, but outlook remains strong. Using Jan 2020 as a pre-pandemic peak reference period, the absolute enterprise valuation of WEB is up 9.7%. On an FY24 P/E basis, WEB trades at a 19.8x multiple, in line with the pre-pandemic 3 year average while at the same time ASX index multiples have expanded from 20.2x to 29.9x. We expect the group to emerge a more efficient organization with a broader addressable market (due to the faster growth of OTAs) at the other end of the pandemic."
Overall, it feels this makes Webjet a great option for investors today.
