Next week, Webjet Limited (ASX: WEB) shares will be in focus when the online travel agent releases its full-year results.
Ahead of the release, let’s take a look to see what analysts are expecting from the company.
What are analysts expecting from Webjet?
According to a note out of Morgans, its analysts are expecting Webjet to report another loss for the 12 months ended 31 March.
Its analysts are forecasting an earnings before interest, tax, depreciation and amortisation (EBITDA) loss of $15.3 million for FY 2022. This compares to the market consensus estimate of an EBITDA loss of $6.8 million.
While on paper this loss doesn’t look great, it is worth noting that it is a big improvement on the company’s performance during the first half of FY 2022. Furthermore, the improvement comes despite the emergence of the highly disruptive Omicron variant during the period.
Our previous FY22 forecast was set before the Omicron variant emerged. Like all travel companies, WEB was materially impacted for ~10 weeks from late December to the end of February. We expect that WEB’s 3Q22 was still stronger than its 2Q22 but to a lesser degree than we thought in November.
We have downgraded FY22 EBITDA forecast due to Omicron. We forecast 2H22 positive EBITDA of A$0.6m, a big improvement from the 1H22 loss of A$15.9m, resulting in an FY22 EBITDA loss of A$15.3m (consensus is -A$6.8m).
Are Webjet shares good value?
Morgans continues to see value in Webjet shares at the current level. Particularly if you zoom out and look at the “recovery year” of FY 2024.
Based on our forecasts, WEB is trading on an FY24 recovery year PE of 18.3x, which is at a discount to its five-year average PE (pre-COVID) of 20.6x.
In light of this, the broker has an add rating and $6.60 price target on Webjet’s shares. This implies potential upside of 20% for investors from current levels.