The S&P/ASX 200 Index (ASX: XJO) shares I'm about to talk about could be two of the leading ideas for share price growth over the next two years.
The current investment environment is clouded by uncertainty over interest rates and stubbornly strong inflation.
I think ASX travel shares have the potential to keep delivering good performance as strong demand continues to play out. I'm always willing to consider names that have fallen hard — the decline could be temporary and/or overdone.
That's why I like the look of these two ASX 200 shares.
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Corporate Travel Management Ltd (ASX: CTD)
Business travel is rebounding just like leisure travel. Certainly, Corporate Travel's latest result showed a good recovery.
The business said that in the FY23 first half, its revenue rose 79% and the underlying earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 182% to $51.3 million. Statutory net profit after tax (NPAT) was $15.7 million, up from a loss of $10 million in the prior corresponding period.
In mid-February, the business said that travel demand "remains strong with no signs of macroeconomic factors impacting the recovery".
Across the ASX 200 share, it's seeing benefits from open borders, operational improvements made during COVID-19, and strengthening profit margins.
In the second half of FY23, it's expecting to make underlying EBITDA of between $109 million to $129 million, which would "provide strong momentum into FY24". It's continuing to win clients, retain clients, and benefit from "significant known large account wins".
According to Commsec, the Corporate Travel Management share price is valued at just 16x FY25's estimated earnings. I think that's a very reasonable price considering how much profit could rise in the coming years as travel normalises.
Domino's Pizza Enterprises Ltd (ASX: DMP)
It has been a really difficult period for Domino's as it loses demand after the end of COVID-19 lockdowns while also having to deal with the effects of higher inflation, which is hurting its margins.
Over the past year, Domino's shares have fallen 36%.
But I think this makes it a very good time to look at the ASX 200 share, considering its long-term growth plans for its pizza operations in Europe and Asia.
Growth over the next five years may be slower than the last five years. But I think the ongoing scale growth of the business will help its underlying margins.
I also think Domino's can grow its same-store sales in FY24 and beyond, which can then hopefully help the business deliver long-term profit growth — and also grow its dividend.
A slowdown of inflation could also be helpful for the business, as it doesn't want to scare off customers by charging too much for its products.
According to Commsec, the ASX 200 share is valued at 22x FY25's estimated earnings. FY23 may be tricky, but I think the longer term is promising because of how large the international market is.
