Will the Webjet (ASX:WEB) share price travel higher in 2022?

Travel shares will be one to watch this year…

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Key Points

  • The Webjet share price is moved sideways this year
  • The company’s management is taking advantage of present opportunities
  • Brokers weigh in on Webjet shares

The Webjet Ltd (ASX: WEB) share price has failed to take off in 2022 following a broader market sell-off on the S&P/ASX 200 Index (ASX: XJO).

It’s no secret that record cases of COVID-19 have caused severe disruptions in Australia’s travel market.

At Tuesday’s market close, the online travel agent’s shares ended 1.11% lower to $5.37 apiece.

What’s the latest with Webjet?

While COVID-19 continues to rapidly accelerate across the country, Webjet has been taking advantage of its opportunities.

It noted in its FY22 first-half results that competition has decreased due to financial pressures impacting the travel industry.

As such, the company highlighted that its WebBeds business is poised to deliver significant revenue growth.

Management has focused on expanding the domestic offering in all regions, with increased penetration into the North American B2B market.

Webjet also boosted and optimised its application programming interface (API) connections for key business to consumer (B2C) clients. It stated that the financial strength of the company makes it a trusted partner for hotel suppliers.

A retained global footprint, hotel supply relationships, and global customer network is set for the global travel market to reopen.

The above has led its WebBeds business to return to profitability. Total Transaction Value (TTV) in H1 FY22 stood at $436 million, a 504% increase when compared against the prior corresponding period.

In addition, WebBeds costs came down to $43 million, a decline of 25% on H1 FY21 levels. This means the company’s transformation into a much leaner and agile business is on track for FY22.

Will Webjet shares make a comeback in 2022?

It’s anyone’s guess when the Webjet share price will return to pre-COVID levels. However, a number of brokers recently weighed in with their thoughts on the company’s shares.

In November, analysts at Morgan Stanley raised the 12-month price target for Webjet shares by 16% to $5.00 a share.

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.

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

While each of the brokers has varying price points, it’s worth noting that Morgans and Macquarie offer an attractive upside. Based on the current share price, this implies increases of around 22.9% and 13.5%, respectively.

Looking ahead, Webjet is scheduled to report its FY22 results in May 2022.

Webjet share price summary

Year to date, the Webjet share price has risen by 4% despite Australia experiencing record COVID-19 cases in the background.

Based on valuation grounds, Webjet has a market capitalisation of around $2.04 billion, with approximately 380.51 million shares on issue.

Should you invest $1,000 in Webjet right now?

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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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