Will Investors Be Full Of Summer Loving For TUI With Update?
Connor Campbell | Sep 26, 2017 10:58
After stagnating for much of the year, bouncing between £11 and £11.75, TUI finally broke through the £12 with some substance in August, eventually climbing all the way to a high of £13.45. Since then the stock hasn’t quite been able to build on those levels, though it hasn’t drifted too far away from its highs. Tui AG (LON:TUIT) now sits at a current trading price of £12.91.
It was the company’s third quarter report in mid-August, and the subsequent ratings and price target upgrade from Credit Suisse (SIX:CSGN), which gave TUI that injection of momentum. Underlying earnings before interest, tax and amortisation surged 37.7% to €221.6 million (and were up 19% on a like-for-like basis), off of a 12.6% increase in group turnover to €4.8 billion. This led TUI to post underlying EBITA of €7.3 million for the 9 months to 30th June, the first time it’s posted a profit during that period of the financial year in its history.
In terms of Thursday’s statement, there are a few things investors will want updating on beyond its full year performance. Any comments on the recent rollout of its Thomson rebranding will be welcome – the long-standing name will disappear, replaced by TUI – as well as news on the final couple of months of summer (back in August the company said it was 88% booked up for the season).
Sterling’s sharp rebound in September may also warrant a mention, especially in regards to the habits of UK holiday makers, as will the impact of the hurricane-destruction witnessed by the Caribbean in the last few weeks.
TUI AG has a consensus rating of ‘Buy’ with an average target price of £12.54.
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