On Tuesday, Webjet Limited (WEB:AU) (OTC: WEBJF) saw its stock rating upgraded from Hold to Buy by a Jefferies analyst. Accompanying this upgrade is a new price target set at AUD1.10, a rise from the previous target of AUD0.95.
The analyst cited several factors contributing to the positive outlook, including Webjet's first-half 2025 results which showed a rejuvenation and a sense of urgency in the company's operations.
The company's management is actively working to improve returns through various strategies such as cost reductions, exemplified by the AUD4 million rightsizing of GoSee, and by investing in the online travel agency (OTA) brand and user experience/user interface (UX/UI). These efforts are part of Webjet's broader initiative to increase its international market share and enhance its non-air ancillary attachment rate.
Despite challenging macroeconomic conditions in Australia and New Zealand, characterized by lower airfares that could potentially stimulate demand, Webjet has demonstrated internal strengths.
The analyst has upgraded the forecasts for the company's earnings per share (EPS) for the fiscal years 2025 to 2027 by 8%, 22%, and 21%, respectively. This adjustment reflects a more detailed understanding of positive working capital driving net interest.
The new price target of AUD1.10 reflects the analyst's increased confidence in Webjet's trajectory, marking a significant endorsement of the company's strategic initiatives and financial prospects. This upgrade and price target adjustment are likely to be of interest to investors and market watchers following Webjet's performance in the travel sector.
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