Why is the Corporate Travel share price lagging the ASX 200 today?

What’s the outlook for Corporate Travel?

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Key points

  • The Corporate Travel share price is descending today 
  • However, this ASX travel share has surged 40% in a year 
  • Corporate Travel updated the market on its COVID-19 recovery plans  

The Corporate Travel Management Ltd (ASX: CTD) share price is in the red today despite the company providing an update on its post-COVID recovery.

This ASX travel share is currently trading at $25.15, a 2.52% fall. For perspective, the S&P/ASX 200 Index (ASX: XJO) is sliding by just 0.11% today.

Let’s take a look at what Corporate Travel reported.

Corporate Travel predicts revenue will improve

Corporate Travel predicted monthly revenue could top calendar year 19 (CY19) levels by the fourth quarter of this year. The company is aiming for an EBITDA of $265 million when the travel industry fully recovers from COVID-19.

In a presentation to the Macquarie conference in Sydney, the company noted it has made “transformational acquisitions” during COVID-19 and has zero debt.

Corporate Travel said the third quarter had a slow start due to the COVID-19 Omicron variant, however March revenue has been a record. Since March 2021, the company has recorded underlying EBITDA profits.

Corporate Travel said the Australian and New Zealand business has experienced a slow international recovery amid supply constraints. This is despite high demand for travel. State Government accounts are less than average due to people working from home. However, a return to work is underway.

Meanwhile, in North America, the top 25 accounts are trading below average but recovering in April. In the European region, a return to work is underway but UK BAU Government accounts are less than 50% recovered.

One expert has recently predicted that corporate travel could grow its earnings post-COVID. As my Foolish colleague Tony reported, Sage Capital portfolio manager Kelli Meagher said that the company raised money to make “some pretty clever acquisitions”, setting them up for post-COVID growth.

We like Corporate Travel over the longer term just because it is now in a much stronger position to gain market share.

We don’t even have to see a full rebound of corporate travel back to [pre-COVID] levels… for Corporate Travel to grow its earnings, because it’s a market share and margin game.

In early April, Corporate Travel completed the acquisition of Helloworld Travel Ltd (ASX: HLO)’s corporate and entertainment travel business.

Corporate Travel share price summary

The Corporate Travel share price has ascended nearly 40% in the past year and more than 14% year to date.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has lost 2% over the past year.

Corporate Travel has a market capitalisation of roughly $3.7 billion based on today’s share price.

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 Corporate Travel Management Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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