Board for take-off: Brokers rate the Corporate Travel Management share price a buy

One broker is tipping 45% upside for the Corporate Travel Management share price.

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Paper aeroplane rising on a graph, symbolising a rising Corporate Travel Management share price.

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Key points

  • Multiple brokers believe the Corporate Travel Management share price is an opportunity
  • The ASX travel share is expecting earnings momentum going into FY23
  • Morgan Stanley is the most bullish with a 12-month price target of $30

There are many brokers who believe the Corporate Travel Management Ltd (ASX: CTD) share price is attractive, rating the ASX travel share as a buy.

The ASX travel sector has been through a lot of disruption since the onset of the COVID-19 pandemic. However, some of those impacts are starting to lift.

While the share price of Corporate Travel Management has recovered quite a lot of its lost ground over the past two years, some experts believe the company is an opportunity for investors.

When a broker says buy, that doesn’t automatically mean a share is going to do well over the next 12 months. But it’s interesting when so many brokers simultaneously think a particular ASX share is good value.

The latest news from this ASX travel share

Company updates can have a sizeable impact on ASX travel shares, particularly in this COVID-19 era.

Last month, Corporate Travel Management gave an update regarding its recovery. It said that revenue is expected to surpass the 2019 calendar year levels in the fourth quarter of FY22, which is the quarter we’re in now.

The company said it expects to be more than 75% larger at full recovery for the travel sector, partly due to “transformational acquisitions” during the pandemic. The company also said it’s targeting $265 million in earnings before interest, tax, depreciation, and amortisation (EBITDA) when at 100% recovery.

The business boasted that it’s recovering faster than the wider corporate travel sector in its largest regions. It said it’s seeing “strong” market share gains in all regions. It notes that, for clients, a value proposition, global scale, and financial strength are all “highly relevant” in the COVID-19 recovery period.

Corporate Travel Management said that it has been making underlying EBITDA profits since March 2021. It has zero debt and management believes it has sufficient cash to support a full recovery.

In terms of the outlook, Corporate Travel said it’s expecting strong revenue and EBITDA momentum into FY23. It experienced a record in March and was expecting new records in April and May.

Broker ratings on the Corporate Travel Management share price

Multiple brokers think this ASX travel share is a buy. All of them have price targets above the current Corporate Travel Management share price, which finished Friday’s session at $20.68.

A price target is basically where an analyst thinks the share price will be in 12 months.

Macquarie rates it as a buy with a price target of $25.80. That implies a potential upside of about 25%. It’s expecting a quicker recovery for the ASX travel share than others in the sector due to the makeup of its client base.

Ord Minnett is another broker that’s positive on the business with a price target of $25.86, also about a 25% rise.

UBS is expecting a bigger rise in the Corporate Travel Management share price. Its price target is $28.20. That implies a possible uplift of more than 35% over the next year. UBS thinks there could be potential for further acquisitions.

Morgan Stanley is even more positive about the business, with a price target of $30. That suggests a possible rise of about 45%. The broker is optimistic about the impending travel sector recovery and its impact on the business.

Of the above brokers, it’s Macquarie and Morgan Stanley that have the highest expectations for the company’s profitability. They put the current Corporate Travel Management share price at 23x FY23’s estimated earnings.

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Tristan Harrison 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 and Macquarie Group 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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