The Flight Centre (ASX:FLT) share price just hit a 5-month low. Is now the time to buy?

The travel agent’s shares are trading at attractive levels today…

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Key points

  • Flight Centre shares dip following slow recovery of travel market
  • Border closures and restrictions impacting company sales
  • First-half FY22 results anticipated to be released on 24 February

The Flight Centre Travel Group Ltd (ASX: FLT) share price dropped to a 5-month low earlier today. Although its shares have slightly recovered, could now be the time to pick up a bargain?

At the time of writing, the travel agent’s shares are swapping hands for $16.06, down 3% for the day. In earlier trade, they slumped to $15.81, their lowest price since mid-August.

It’s worth noting that since reaching a post-COVID high of $25.28 in October, its shares have fallen by 36%.

What has happened to Flight Centre shares lately?

The dumping of the Flight Centre share price is being driven by the sluggish recovery across the travel market.

The number of Omicron cases across the country has led Western Australia to delay the reopening of its borders. In addition, extended restrictions across the east coast have impacted foot traffic to Flight Centre stores.

Without clearer visibility surrounding the resumption of travel, Flight Centre could be battling to achieve strong financial numbers for FY22.

Late last year, the company highlighted a return in 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).

On a positive note, the business has a much leaner and more efficient cost base model compared to pre-COVID. This is expected to translate to bumper profits when considering the long-term.

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

Are Flight Centre shares a buy?

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

The team at Citi raised its 12-month price target by 8.1% to $18.31 for Flight Centre shares. Based on the current share price, this implies an upside of 14% for investors.

On the other hand, Goldman Sachs cut its assessment on the company’s shares by 1.4% to $20.40. Its analysts believe there is still value left in the travel agent over the next 12 months. This represents an uplift of 27% for Flight Centre shares at today’s prices.

Flight Centre share price summary

It’s been a challenging 12 months for the Flight Centre share price, despite gaining around 7% over the period.

The company’s shares reached a 52-week high of $25.28 in early October when Australia appeared to be managing the pandemic. However, since the outbreak of the Omicron variant, its shares have nosedived.

On valuation grounds, Flight Centre presides a market capitalisation of roughly $3.3 billion, with approximately 199.61 million shares outstanding.

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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