Now could be the time for investors to buy Flight Centre Travel Group Ltd (ASX: FLT) shares.
That's the view of analysts at Citi, who believe the next couple of years could be very positive for the ASX 200 travel share.
What is Citi saying about this ASX 200 share?
According to a note from last week, the broker has retained its buy rating on the company's shares with a price target of $25.85.
Based on the current Flight Centre share price of $19.66, this implies a potential upside of more than 31% for investors over the next 12 months.
But the returns won't stop there. The broker also expects the ASX 200 share to be in a position to more than double its dividend in FY 2024. It is forecasting a fully franked 50 cents per share dividend for the period, up from 18 cents per share in FY 2023.
This would mean a yield of 2.5%, which boosts the potential total return by almost 34%.
Why is the broker bullish?
Citi believes that the tide could be turning for Flight Centre now. So much so, that it suspects that the ASX 200 share could be at the start of a major upgrade cycle.
The broker explains:
At earlier stages in the pandemic recovery, we thought FLT had run ahead of fundamentals as the way the re-opening was playing out, didn't favour FLT's business model. However with International airline capacity and more complex trips returning as the last leg of the post pandemic recovery. We think FLT is a logical next recovery play and see a pathway to an 18-24 month upgrade cycle. Subsequently we remain Buy rated and see a positive catalyst at the upcoming AGM.
