Why did the Flight Centre (ASX:FLT) share price have such a volatile year in 2021?

The company’s shares faced a challenging 12 months. We take a closer look.

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The Flight Centre Travel Group Ltd (ASX: FLT) share price went on a rollercoaster ride throughout 2021. Its shares reached a post-COVID high of $25.28 in October before sharply pulling back by almost 30% to today’s prices.

It appears that investors have mixed feelings about the value of Flight Centre shares in the current climate.

At the time of writing, Flight Centre shares are down 0.22% at $18.29 apiece.

What happened to Flight Centre in 2021?

The volatility in the Flight Centre share price last year was driven by new COVID-19 variants, resulting in a staggered recovery across travel markets.

Extended lockdowns and restrictions caused by the Delta variant impacted the company’s operations up until late August. The company spent the first half of the year in hibernation mode as vaccination programs began rolling out. In response, Flight Centre shares were trading around the $15 mark.

However, clearer visibility surrounding the resumption of travel led to Flight Centre shares accelerating above the $20 barrier in September and October. This was due to COVID-19 vaccination targets being met nationally, which provided passengers with more freedoms to travel outside Australia.

The company noted a return to leisure and corporate profitability. Corporate transaction numbers were at 50% of pre-COVID levels, representing around 40% of Flight Centre’s total transaction value (TTV).

A surge in cases overseas in November saw Flight Centre shares nosedive by 20% to roughly $16. Then the emergence of the Omicron variant on the world stage brought further troubles for the Flight Centre share price.

With seemingly no end in sight, investors will be wondering how the company is tracking financially for FY22. It is worth noting the business is a much leaner and more efficient cost base model compared to pre-COVID.

All eyes will be on Flight Centre’s FY22 half-year results which are expected to be released on 24 February.

Is the Flight Centre share price attractively valued?

A couple of brokers weighed in on the Flight Centre share price during the final months of 2021.

Multinational investment bank Citi raised its 12-month price target by 8.1% to $18.31 for Flight Centre shares. This is relatively in line with the current share price.

On the other hand, Goldman Sachs cut its assessment on the Flight Centre share price by 1.4% to $20.40. Its analysts believe there is still some value left in the travel agent over the next 12 months.

A recap on Flight Centre shares

It’s been a challenging year for Flight Centre shareholders, despite gaining around 20% over the past 12 months of trading.

While hitting a low of $16.27 in December, the company’s shares have staged a small rebound. There is currently a support level around the $17.50 mark for Flight Centre shares.

Motley Fool contributor Aaron Teboneras 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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