This ASX 200 share could be on a 'pathway to an 18-24 month upgrade cycle'

Citi is expecting big things from this popular share in the next couple of years.

| More on:
A happy couple sit together at an airport

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro 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 Flight Centre Travel Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Travel Shares

Woman on a tablet waiting in for her flight in an airport and looking through a window.
Travel Shares

Why did the Flight Centre share price just plunge 9%?

Investors are punishing the Flight Centre share price on Wednesday. But why?

Read more »

A smiling woman looks at her phone as she walks with her suitcase inside an airport.
Travel Shares

4 reasons to buy Qantas shares today

Thinking about buying Qantas shares? Here’s why this expert is bullish on the ASX 200 airline.

Read more »

A man sits in the airport terminal with a laptop and credit card, ready to make a travel booking.
Travel Shares

Would Warren Buffett buy Qantas shares?

Would Buffett get on board with the airline’s shares right now?

Read more »

A happy woman flies with arms outstretched on her boyfriend's back on the beach at dusk.
Travel Shares

Is the Qantas share price too low to ignore?

Can this ASX stock fly again?

Read more »

Man sitting in a plane looking through a window and working on a laptop.
Travel Shares

Why did ASIC take a look when Qantas shares fell last year?

The regulator was asking questions.

Read more »

Two kids wearing pilot's goggles take flight down the runway on their tummies with arms outstretched like wings.
Travel Shares

Up 6% in FY 2024, what's ahead for the Flight Centre share price in FY 2025?

The Flight Centre share price could be poised for big gains in FY 2025. But why?

Read more »

Man sitting in a plane seat works on his laptop.
Travel Shares

Why did the Qantas share price fly backwards in FY 2024?

Despite surging revenues, the Qantas share price lost ground in FY 2024. But why?

Read more »

Man sitting in a plane seat works on his laptop.
Travel Shares

Qantas share price drops 3% amid Qatar rumours

Qantas shares had a turbulent start to trading this morning...

Read more »