Flight Centre Travel Group Ltd (ASX: FLT) shares are climbing higher on Thursday morning. At the time of writing the shares have risen 1.96% to $12.47 a piece. The gains are welcome news for investors after the shares dropped to a multi-year low of $11.46 late last week.
Over the past month the travel operator's shares have increased 6.49%, but after a huge sell-off earlier this year, the shares are still down 24.9% over the past 12 months.
The latest share price rise follows the company's annual general meeting (AGM) and trading update yesterday morning. Flight Centre's managing director, Graham Turner, revealed that the company has started FY 2026 positively. He added that while the company's Leisure segment isn't out of the woods just yet, there are positive signs that the recovery is coming.
Flight Centre revealed that it is targeting an underlying profit before tax of $305 million to $340 million in FY26. This represents a 5.5% to 17.6% increase from the prior corresponding period. The company expects the lion's share of this performance to come in the second half of the year.
This morning, analysts at Macquarie Group Ltd (ASX: MQG) updated their target price on the shares.
More upside ahead for Flight Centre Shares
In a new note to investors, the broker has confirmed its outperform rating on the travel stock. It has also raised its target price to $16.85, up from $16.55 in August.
At the time of writing this represents a potential 35.1% upside over the next 12 months.
"Valuation: TP +2% to $16.85ps ($16.55 prior), reflecting earnings revisions. Our current valuation implies a ~7x NTM EV/EBITDA multiple, with material upside on earnings delivery," Macquarie said in its note.
Changes to EPS: FY26/27/28E +6%/+2%/+3%, reflecting revisions post AGM trading update and guidance.
Outperform. FLT is well on track to deliver FY26 guidance, with solid TTV growth across both segments. Corporate is seeing the early benefits from Prod Ops initiatives with strong TTV growth on lower FTEs. Valuation attractive, and we see material upside to the current share price over a 12m view.
What else did Macquarie have to say?
The broker noted that Flight Centre's FY26 underlying profit before tax guidance is, at the mid-point, 1-2% ahead of market estimates.
FLT has seen solid TTV growth over first four months with underlying profit tracking ahead of pcp, although FLT continues to guide to 1H26 UPBT being largely in line with the pcp.
Macquarie added that corporate is performing well, driven by a return to modest profit in Asia, a solid pipeline of new account wins, and further productivity gains in Q1 FY26.
We remain confident Corporate will deliver strong revenue growth through FY26 with improving margins as operational and cost initiatives come through.
