The Flight Centre Travel Group Ltd (ASX: FLT) share price is dropping again on Tuesday.
In afternoon trade, the travel agent giant's shares are down almost 3% to $15.92.
This means the Flight Centre share price is now down over 6% this week.
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Is the Flight Centre share price weakness a buying opportunity?
A number of brokers have been running the ruler over the company's trading update and given their verdict on the Flight Centre share price.
One of those is Goldman Sachs.
According to a note from this morning, the broker has mixed feelings over the company's update. While its analysts note that the "trading update flagged strong recovery momentum for travel overall," Flight Centre's costs disappointed. It commented:
Cost ramp up has been ahead of recovery, especially for corporate. We expect this to be a temporary setback to profit recovery with strong profit recovery coming through in late FY23 and FY24.
Goldman also has concerns over Flight Centre's revenue margin, which has been facing a number of headwinds. It explained:
As noted post FY22 results, revenue margin recovery remains a key concern for us. While there are undoubtedly temporary factors impacting this such as mix and elevated ticket prices, we remain concerned regarding longer term structural move towards online, which are weaker margin channels.
In light of this, the broker has retained its neutral rating with a trimmed price target of $16.10. This is broadly in line with where the Flight Centre share price is trading today.
It concludes:
Overall, we revise our earnings outlook for FLT to reflect the higher interim costs and better than expected topline recovery. Our 1H23 EBITDA outlook remains at the top-end of guidance at A$89mn (A$70-90mn) as we remain positive on continued momentum in activity recovery, which is the key delta impacting the guidance range.
