After a decent start to the day, the Webjet Limited (ASX: WEB) share price is trading lower this afternoon.
At the time of writing, the online travel agent's shares are down 0.5% to $5.47.
This means the Webjet share price is trading largely flat in 2022.
Where next for the Webjet share price?
According to the team at Goldman Sachs, its analysts believe the Webjet share price could take off from here.
This morning Goldman retained its buy rating and $6.90 price target on the company's shares. This implies potential upside of 26% for investors over the next 12 months.
What did the broker say?
Webjet remains the broker's top pick in the sector. Its analysts prefer the company to rival Flight Centre Travel Group Ltd (ASX: FLT), with the latter getting only a neutral rating and $19.50 price target.
In respect to the travel market, the broker believes that pent up demand will offset inflationary pressures. It commented:
"Despite the inflationary macro environment, we believe the outlook for travel remains relatively protected due to pent-up demand for travel as well as strong consumer health from an economic perspective. Domestically in Australia, our expectations are for consumption to remain robust at c. 6.7% CAGR over FY22-24e on a nominal basis with the lifestyle services category (travel, entertainment etc) expected to see the best growth at c. 10.8% CAGR over the same period."
But the main reason that Goldman is positive on the Webjet share price is the WebBeds business to business (B2B) business. It explained:
"Webbeds is the 2nd largest Bedbanks operator globally with Hotelbeds, the number 1 player, remaining a strong market leader. Management estimates the addressable market for the Bedbanks business to be at c. A$70bn, representing c. 8.8% of the accommodations market.
At the other end of the COVID crisis, while questions remain about the permanent closure of some individual hotels, we believe that the Bedbanks businesses will remain beneficiaries of the recovery due to their broader distribution ability which is a positive in the constrained demand environment.
Separately, we expect the Webbeds business to be more efficient coming out of the pandemic driven by greater efficiencies from streamlining of platforms and ERP and other initiatives which the group expects to deliver c. 20% increase in cost efficiencies."
