How did the Webjet (ASX:WEB) share price perform in 2021?

Webjet shares had another eventful year in 2021.

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Key Points

  • The Webjet share price finished up 2% in 2021
  • Uncertainty in the travel market appeared to weigh down investor confidence
  • New Omicron variant may be further impacting on the Webjet share price

The Webjet Limited (ASX: WEB) share price faced a challenging year in 2021. The online travel agent ended last year on a morbid note as COVID-19 cases caused rampage across the country.

Since the beginning of 2021, the company’s shares moved marginally higher, up 2%. In comparison, the S&P/ASX 200 Index (ASX: XJO) gained roughly 13% over the same period.

For the final day of 2021, Webjet shares closed 1.71% lower to $5.17 apiece. It’s worth noting that in early October, its share price touched a 52-week high of $6.89 before treading lower.

What happened with the Webjet share price last year?

The Webjet share price was turbulent during 2021 followed by uncertainty relating to the recovery of the travel market.

While Australia managed to control the spread of COVID-19 early last year, Webjet shares breathed a sign of life. During March 2021, the company’s share price hit a 52-week high of $6.33 at that time.

However, investor confidence turned negative when outbreaks of COVID-19 began to prop up across the country in mid-2021. This caused Webjet to go back in hibernation mode and weather out the storm as Australia went into hard lockdown.

The turmoil drove investors to the exits, sending the travel agent’s shares to a 52-week low of $4.36 in May.

Fast-forward to November, the outlook for the travel industry became rosy again as COVID-19 had been on a steady decline. Furthermore, the Australian government’s long-awaited re-opening of international travel excited investors, sending Webjet shares to yearly highs.

But yet again, a new Omicron variant caused widespread panic across the globe due to its highly infectious nature. It is said to have 30 spike proteins which is double of what has been detected in the delta variant. This means it could easily bypass current defences from the existing COVID-19 vaccines.

As such, several countries have gone back into lockdown, and Australia has re-reintroduced restrictions because of the record number of cases. This has led investors to remain cautious given the unpredictable timing of when COVID-19 will permanently recede.

Should you buy Webjet shares?

A number of brokers that recently weighed in their thoughts believe that the Webjet share price is fairly valued.

Analysts at Morgan Stanley raised the 12-month price target for Webjet shares by 16% to $5 apiece.

On the other hand, Credit Suisse slashed its outlook on the online travel agent’s shares by 5.3% to $5.40.

Leading Australian investment firm, Morgans had a more bullish outlook. The broker lifted its view on Webjet shares by 6.5% to $6.60. Based on the current share price of $5.46, this implies an attractive upside of almost 21% for investors.

Also following suit, the team at Macquarie cut their 12-month price target on Webjet shares by 8.3% to $6.10 apiece.

Webjet share price summary

Year to date, the Webjet share price has risen by 5% despite Australia experiencing record COVID-19 cases in the background.

Based on valuation grounds, Webjet has a market capitalisation of around $2.08 billion, with approximately 380.51 million shares on issue.

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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 Webjet Ltd. 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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