Could the Flight Centre (ASX:FLT) share price hit $13.50 by Christmas?

A broker has a pretty negative impact on Flight Centre shares.

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Could it be possible for that Flight Centre Travel Group Ltd (ASX: FLT) share price to fall to less than $14 before Christmas?

There are plenty of brokers out there that have price targets for Flight Centre shares that are less than the current level.

However, there is one broker that has a particularly negative outlook for the ASX travel share.

What is the Flight Centre share price target?

The broker Ord Minnett has a price target of just $13.72. That implies the broker believes that Flight Centre shares could fall by around 40% over the next 12 months.

It’s not just COVID-19 impacts that the broker is thinking about. Ord Minnett is taking into account how the travel agency industry has changed and is changing. The broker believes that Flight Centre’s margins are going to be impacted and it needs to cut expenses to ensure that its profit isn’t materially hurt.

Despite that, Ord Minnett thinks that Flight Centre is going to return to making profit in FY23 as well as paying a dividend.

The broker has pencilled in a dividend of around $0.14 per share in FY23.

At the current Flight Centre share price, Ord Minnett believes that it’s valued at 48x FY23’s estimated earnings.

However, not all brokers are as negative on Flight Centre. One of the most recent broker ratings is a neutral rating from UBS, with more positivity due to the higher vaccination coverage. The UBS price target on Flight Centre is $18.85.

UBS reckons that Flight Centre shares are valued at 32x FY23’s estimated earnings.

How is the ASX travel share performing?

Over the last two months the Flight Centre share price has risen by around 60%.

In reporting season, the company said that it generated an underlying loss in line with its guidance at $507 million.

However, the business noted that the recovery was/is gaining momentum, particularly in the corporate sector and in the US.

It said that it was achieving month on month revenue growth despite COVID-19 impacts. Corporate total transaction value (TTV) was tracking at 40% of pre-COVID levels globally by the year end. It also experienced a “rapid” leisure and corporate recovery in the US late in the further quarter.

Flight Centre said that it was targeting a return to monthly profitability in both corporate and leisure during FY22.

The company mentioned that thr profitability forecast included the resumption of further international travel, with the potential “material benefit” from the trans-Atlantic reopening.

It was only in the last couple of days that the US has announced that it’s going to open up its borders to vaccinated passengers from dozens of countries, who won’t have to quarantine. Those countries include the UK, India, France, Germany, Italy, Spain and so on.

The US is also opening up its land borders with Canada and Mexico for fully vaccinated foreign nationals.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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