Shares in Web Travel Group Ltd (ASX: WEB) have been gyrating wildly over the past week, with double-digit falls on Friday followed up with double-digit gains on Monday, all over a release to the market that the company didn't see as material.
The company issued a brief market release on Friday saying its Spanish subsidiary was being audited, which sent its shares plunging, even prompting a 'please explain' letter from the ASX itself.
The company responded, saying it did not believe the announcement was market sensitive and that the audit had been proactively announced to the market following coverage in Spanish media.
Web Travel Group shares have since made up much of the ground lost, but are still shy of the $4.20 they were changing hands for on Thursday, and are trading up 5.3% on Tuesday at $3.69.
Image source: Getty Images
So are the shares cheap at current levels?
I've looked at reports from three different brokers, and the consensus is that yes, at these levels, Web Travel shares are a buy.
UBS has the most bullish share price target on the stock of $6.15.
In a note to clients sent out this week, the team seemed unfazed by the Spanish tax audit, saying the company said they had been audited in Spain in 2024, and management "emphasised they consider this audit immaterial'' on an investor call this week.
The UBS team went on to say:
Minimal details given around underlying tax audit, however conference call comments should alleviate some investor concern. Pleasingly, the business is continuing to outperform the underlying travel market (and in line with expectations), which we think will be well received.
UBS is also forecasting a large dividend yield of 8.2% for Web Travel, with an anticipated total return of more than 100%.
The team at Jarden also has a bullish price target of $5.70 per share.
The Jarden team said the company gave "a reassuring update on both trading and the immateriality of the Spanish tax audit'' on the investor call.
As well as dismissing the audit as immaterial, the Jarden team said the company reaffirmed its FY26 guidance of $147-$155 million, and also reaffirmed double-digit booking growth.
The Jarden team also addressed the potential impact of AI on the business.
Web is a unique global business with a large total addressable market, within which it is growing share (>3x market) and return on invested capital. The key near-term debate will be the impact of AI and notably around disintermediation risk and AI agents ability to automate rate optimisation. However, we believe bed-banks will remain an important source in aggregating this process, with Web already far advanced with its own Ai pricing model driving conversion uplifts.
Finally, Morgan Stanley has a $4.40 price target on Web Travel shares.
