The Webjet Limited (ASX: WEB) share price is sliding lower with the market on Thursday.
In afternoon trade, the online travel agent's shares are down 2% to $5.39.
This latest decline means the Webjet share price is now in negative territory for 2022.
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Is the Webjet share price in the buy zone?
According to a note out of Goldman Sachs, its analysts have reiterated their buy rating and $6.90 price target on the company's shares ahead of its full-year results release later this month.
Based on the current Webjet share price, this implies potential upside of 28% for investors over the next 12 months.
What did the broker say?
Firstly, Goldman is expecting a soft result from Webjet in FY 2022 due to COVID headwinds. Its analysts have forecast FY 2022 revenue of $143.6 million and EBITDA of $1.5 million.
However, the broker believes that this release will signal the end of the market's willingness to look through weak results. Particularly given how in April passenger traffic numbers reached 90.5% of pre-COVID levels in the US and 81.4% in London's Heathrow Airport. It explained:
In our view the market will no longer look through weak results beyond FY22 and we expect stock prices to start being more correlated to company fundamentals as opposed to trading based on news of travel recovery.
However, that shouldn't matter because Goldman is expecting strong results from Webjet in FY 2023 and FY 2024.
What is expected?
Goldman is bullish on the Webjet share price due to its belief that the company is well-placed for strong growth over the coming years. This is thanks to its Bedbanks business, acquisition opportunities, and the ongoing shift to online booking. It said:
We reiterate our Buy rating on WEB due to the stronger outlook for the Bedbanks business in the longer term, favorable exposure to the growing online channel and the strong balance sheet offering the opportunity to explore bolt-on acquisitions as well as weather interim volatilities driven by COVID-19.
The broker is expecting revenue growth of 152% to $362.2 million in FY 2023 and then 20% to $434.7 million in FY 2024.
Things are expected to be even better for its EBITDA, with Goldman pencilling in a material lift in EBITDA from $1.5 million to $155.4 million in FY 2023 and then a 32.8% jump to $206.4 million in FY 2024.
All in all, this could make Webjet a share to consider if you're looking for travel sector exposure.
