The Webjet Limited (ASX: WEB) share price is having a decent finish to the week.
In afternoon trade, the online travel agent's shares are up 1.5% to $5.96.
This follows a positive reaction from brokers to yesterday's full-year results release.
What was the reaction?
Overall, the reaction to Webjet's full-year results was positive, with a number of brokers, such as such as Citi, Goldman Sachs, Morgans, and UBS reiterating their buy ratings today.
According to the note out of Morgans, its analysts have retained their add rating with a $6.55 price target.
Based on the current Webjet share price, this implies potential upside of 10% for investors over the next 12 months.
What did the broker say?
Morgans was pleased with Webjet's performance in FY 2022, noting that its "result was stronger than expected with TTV [total transaction value], revenue and cashflow beating" the broker's forecasts.
Another positive that its analysts highlighted was the company's strong start to the new financial year. It commented:
The 1Q23 bookings, TTV and EBITDA are all currently tracking well head of 4Q22. May is currently tracking ahead of April, which was WEB's most profitable month since March 2020, with all business segments profitable. WEB continues to target a return to pre-COVID booking levels in the 2H23.
All in all, Morgans believes this shows that Webjet is well-placed for growth thanks to the hard work it put in during the COVID-19 crisis. This includes cost reduction initiatives that will reduce its cost base by 20% once the business returns to scale.
In our view, WEB hasn't wasted a crisis and will come out of COVID with a materially lower cost base, consolidated systems and a large business in the US. We maintain an Add rating on WEB with a $6.55 price target
Based on our forecasts, WEB is trading on an FY24 recovery year PE of 19.5x, which is at a discount to its five-year average PE (pre-COVID) of 20.6x.
