With travel markets bouncing back strongly from the pandemic, investors may be wondering which ASX 200 travel shares are worth buying right now.
The good news is that Goldman Sachs has been looking at the sector and recently named three of the best travel shares to buy now.
According to notes, the broker believes that Corporate Travel Management Ltd (ASX: CTD), Qantas Airways Limited (ASX: QAN), and Webjet Limited (ASX: WEB) are the ASX 200 travel shares to buy right now.
In fact, Goldman is so positive on these three shares that it has put them on its coveted conviction list.
Here's what the broker is saying about them:
Image source: Getty Images
Corporate Travel Management
This morning, Goldman has reiterated its conviction buy rating with a $20.30 price target on this corporate travel specialist's shares. Ahead of its half year results, the broker commented:
For CTD, we view the recent trends in market multiples and consensus momentum as being unwarranted. We expect reiteration of FY23 guidance, recovery in North America and cash flow as three key factors to watch for which could assist re-rating of the stock this earnings season.
Qantas
Goldman recently stated its belief that the Qantas share price was undervalued at the current level given its positive outlook. It has a conviction buy rating and $8.20 price target on its shares. The broker commented:
With the market capitalization 10% above pre-COVID levels and EV (based on last reported net debt) 8% below pre-COVID, we believe the stock is not appropriately pricing QAN's improved earnings capacity. Specifically, our FY23e EPS forecast is 58% above FY19a levels with group capacity still 21% below pro-COVID levels. Even as the yields moderate (with capacity restoration) our FY24e EPS (100% of FY19 capacity) is 46% above FY19 levels.
Webjet
Finally, the broker has a conviction buy rating and $7.20 price target on Webjet's shares. While the company won't be releasing results in February, Goldman sees scope for a re-rating. It said:
WEB is an off-cycle earnings stock with the earliest company disclosed catalyst only expected in May 2023. However, we note that WEB continues to be a preferred pick for us in the travel space heading into the February results season as we expect the industry momentum and relative performance for Webjet's OTA business vs. FLT will drive continued re-rating of the stock.
