A report from Australian Financial Review reveals an uncertain future for travel stocks like Flight Centre Travel Group Ltd (ASX: FLT) shares.
According to the report, uncertain economic conditions and a fear of travelling to the United States could reduce Flight Centre earnings this financial year by more than $100 million.
On Monday, Flight Centre said the company is now unlikely to deliver the 14% to 26.5% year-on-year growth needed to achieve its prior FY 2025 guidance of a $365 million to $405 million underlying profit before tax (UPBT).
FY 2025 UPBT guidance was downgraded to between $300 million and $335 million.
According to AFR:
The Trump administration has increased immigration checks and border security measures, leading to concerns among tourists and other travellers that they will be met with a hostile reception if they visit the US. Official figures show March saw the steepest drop in travellers from Australia since the COVID-19 pandemic, with visitor numbers down 7 per cent.
Flight Centre's share price has fallen 23.64% in 2025.
Are Flight Centre shares a buy low opportunity?
Despite the downturn in travel to the US, Flight Centre Chief Executive Officer Graham Turner is optimistic. He said he remained confident of record transaction volumes in the 12 months to June 30.
He also said the company would maintain its dividend payout.
Turner said:
Generally, the premium classes, particularly on long-haul international are holding up pretty well.
Brokers are tipping a bounce back from Flight Centre shares, with Bell Potter placing a $18.45 target price on the travel shares, which would be a near 45% rise.
Macquarie is less confident on the potential of Flight Centre shares. The broker points to changing US policies, and a material reduction in consumer demand for leisure travel as barriers to short term growth.
The broker has a 12 month price target of $16.20.
Elsewhere, Trading View has a one year target price of $17.33 on Flight Centre shares.
Online brokerage platform SelfWealth has an average price target of $18.03.
Corporate Travel Management Ltd (ASX: CTD)
According to the AFR, while US travel is subdued, corporate travel volumes to other markets continued to grow.
This could be positive news for ASX listed travel company Corporate Travel Management Ltd (ASX: CTD).
It provides business travel management services, across corporate travel, meetings and events, leisure, and loyalty programs.
The company operates across Australia and New Zealand, North America, Asia and Europe.
It is down 16.58% over the last 12 months but brokers are tipping a rebound.
Bell Potter currently has a target price of $17.48 on CTD shares which indicates an upside of 34.66%.
Earlier this month, Morgan Stanley placed an overweight rating and $18.30 price target on its shares.
