Buyers have yet to emerge from the woods after the travel group’s latest mixed update
Of the 14 banks and brokers covering TUI, seven are negative on the stock. Only two say “buy” with the rest sitting on the fence. The consensus price target is 285p
TUI AG (LSE: TUI) ‘s better than expected operating cash flow in the fourth quarter was still not enough to convince Barclays Capital of the merits of investing in the travel group.
There was also some “push” from parts of the business, including the hotels, which returned to profitability.
However, he added: “The COVID-19 travel requirements and information flow have, once again, created uncertainty,” Barclays said in a brief note to customers.
“In the meantime, the risk of dilution remains as the group continues to deal with the leveraged balance sheet.”
It remains “underweight” in TUI stocks with a price target of 200p. By mid-afternoon, stocks changed hands for 224p, up 1.4%.
Of the 14 banks and brokers covering TUI, seven are negative on the stock. Only two say “buy” with the rest sitting on the fence. The consensus price target is 285p.
Earlier, the travel group said vacation bookings were slowing after the emergence of the Omicron Covid variant. It has recorded 4.1 million bookings for its upcoming winter and summer seasons.
TUI said: “Increased media coverage of rising incident rates and the emergence of the new Omicron variant have weakened this positive momentum, especially for the winter.”
Fourth quarter losses were reduced to £ 60.5million for the company’s fourth quarter as of September 30, from £ 852million a year earlier.