Down 15% in a month, is the Corporate Travel share price a bargain?

A couple of brokers weigh in on the Corporate Travel Management share price.

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Key points

  • Corporate Travel Management shares finished slightly lower today but are still up by more than 4% over the past week
  • The company's shares tumbled throughout the month but have since regained composure
  • Brokers JPMorgan and Macquarie both believe Corporate Travel Management shares are undervalued at current prices

The Corporate Travel Management Ltd (ASX: CTD) share price finished slightly in the red on Tuesday.

The travel company’s shares reached an intraday high of $22.66 during afternoon trade — a gain of 2% — before falling back to end the day down 0.23% at $22.17.

Despite today’s slip, the Corporate Travel Management share price has gained more than 4% over the past week, helping it claw back some of its losses this month.

What’s driving Corporate Travel Management shares higher lately?

Investors have been buying up Corporate Travel Management shares after they dropped by 15% in the past month.

It appears bargain hunters are taking advantage of the share price weakness following the strong volatility encountered.

Earlier this month, Corporate Travel Management delivered a market update revealing revenue is expected to surpass 2019 levels in Q4 2022. This is being underpinned by the company recovering faster than the corporate travel sector in its largest regions.

Furthermore, management is forecasting earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $265 million on the full recovery, up 75% on pre-COVID numbers.

Supporting these gains, Corporate Travel Management is a much larger business following a series of acquisitions during COVID-19. This includes Travel and Transport, Inc. in 2020 and more recently, Helloworld Corporate in 2022.

Is this a buying opportunity?

The good news for investors is that a number of brokers believe the Corporate Travel Management share price is attractively valued.

The team at JPMorgan raised its price target by 2% to $25.00 in early May, which implies an upside of more than 12%.

On the other hand, Macquarie cut its outlook by 3.4% but to a more bullish price of $25.80 apiece. This represents a potential upside of 16% from where it trades today.

It appears both analysts think that there’s still significant value in the travel company and that a recovery is inevitable.

Corporate Travel Management share price summary

Since this time last year, Corporate Travel Management shares have travelled 6% higher as the travel sector begins to open up.

When looking at the year to date, its shares have pushed slightly ahead, with a 1% gain.

On valuation grounds, Corporate Travel Management commands a market capitalisation of roughly $3.15 billion.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. 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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