ASX 200 travel stocks are firmly under the spotlight right now as major players release their earnings results and expectations for the year ahead.
But there is one Aussie travel share expected to produce a huge return over the next 12 months.
The Flight Centre Travel Group Ltd (ASX: FLT) share price is up 1.94% in early-afternoon trade. At the time of writing the shares are changing hands at $12.62 each following the company's FY25 announcement yesterday. Over the year, the share price is down 37.06%.
For context, the S&P/ASX 200 Index (ASX: XJO) is 0.073% higher today and up 11.10% over the year.
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A quick FY25 recap
The company posted a 10% year-on-year drop in underlying profit before tax (UPBT) to $289.1 million yesterday. Statutory profit before tax came in at $213 million, which was down 3% from FY 2024.
It wasn't all negative though, Flight Centre achieved a record total transaction value (TTV) of $24.5 billion, up 3% year-on-year. And FY 2025 revenue of $2.78 billion was up 3%.
Going forward, management expects some ongoing turbulence, but thinks the market will stabilize through FY26.
So, it looks like the tide could start turning. Macquarie Group Ltd (ASX: MQG) is also optimistic that the travel agency network can turn things around in FY26.
Flight Centre shares set for takeoff
In a recent note to investors, the broker confirmed an outperform rating on Flight Centre shares. It also raised its target price to $16.55, up from $15.20 last month.
At the time of writing, that represents a potential upside of an impressive 31.41% over the next 12 months.
"Valuation: TP 9% to $16.55 ($15.20 prior), reflecting earnings revisions and reduction in share count post buyback (with buyback ongoing). Our current valuation implies a ~7x NTM EV/EBITDA multiple, with material upside on earnings delivery," Macquarie said.
Outperform. While profit disappointed, both segments delivered solid TTV growth which should accelerate if macro conditions are more supportive. Valuation is attractive, and we see material upside to the current share price over a 12m view.
What else did the broker have to say about the ASX 200 stock?
Macquarie sees some green shoots for the business in FY26 with strong total transaction value (TTV) growth across Flight Centre's Leisure and Corporate sectors, and growth in Leisure enquiry and web traffic.
"FCM customer discussions indicate corporate travel spend will increase in FY26 post a subdued FY25," the broker said.
Macquarie added that recent cyclical challenges have persisted in FY26, with 1H profit expected to be flat versus the prior corresponding period.
The outlook carries some conservatism given (1) recent volatility making easier comps, (2) Asia should see a ~$20m+ profit swing, (3) a ~$5m benefit in "Other" segment, (3) GBS benefits growing in 2H, & (4) Corp Prod Ops.
