What brokers are saying about the Corporate Travel Management Ltd (ASX:CTD) share price

Talk about bad timing! The Corporate Travel Management Ltd (ASX: CTD) share price is crashing today just as a broker upgraded the stock following its savage sell-off.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Talk about bad timing! The Corporate Travel Management Ltd (ASX: CTD) share price is crashing today just as a broker upgraded the stock following its savage sell-off.

CTD's share price crashed 11.6% to $20.28 in lunchtime trade and may soon re-test its 2018 low that it hit on Monday.

The stock is the second-worst performer on the S&P/ASX 200 (Index:^AXJO) (ASX: XJO) index at the time of writing with the Lendlease Group (ASX: LLC) taking the wooden spoon with an 18.5% dive after announcing a big write-down.

What's going on?

CTD's problems were triggered by its battle with hedge fund VGI Partners, which has aggressively short-sold the stock and released a report outlining several issues with CTD's business.

The company issued a vigorous rebuttal of VGI's accusations and released positive findings from auditor Ernst & Young (EY) to help drum up support for the stock. EY is also the auditor for Flight Centre Travel Group Ltd (ASX: FLT).

Morgans responded by upgrading CTD to "add" from "hold" today as it believes the stock is being unfairly targeted.

"After having more time to review the VGI reports and the increased disclosure CTD provided today, we have confidence in the company's business model, growth strategy and financials," said the broker.

"We continue to believe the VGI claims contain a number of inaccuracies and appear unfounded on what we believe is a quality company."

Morgans increased its price target on the stock to $26.72 from $23.30 per share and said that the valuation doesn't factor in any upside from potential acquisitions.

Morgan Stanley has also come out to reiterate its "overweight" recommendation on the stock with a $27 per share price target following the EY review.

The broker noted that the key question over cash generation has been addressed by the auditor with EY confirming that working capital movements are in line with total transaction value (TTV) and that investor concerns do not accurately reflect payments and receipts.

Foolish Takeaway

But don't think for a moment that the share price volatility is over and today's share price reaction proves this. While CTD's current share price may prove to be cheap over the coming months, I'm putting it in the "too hard" basket – particularly given that there are other promising stocks with a clearer outlook.

Coincidentally, CTD's sell-off today comes as the Flight Centre share price and Webjet Limited (ASX: WEB) share price are also under pressure.

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Flight Centre Travel Group Limited. The Motley Fool Australia has recommended Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Fallers

A woman faces the camera with her lip raised up to the side in total confusion.
Bank Shares

Why is the CBA share price being hit so hard today?

Has CBA's luck finally run out?

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why ASX, CBA, Iperionx, and Sayona Mining shares are dropping today

These shares aren't having a good session on Tuesday. But why?

Read more »

A businesswoman exhales a deep sigh after receiving bad news, and gets on with it.
Share Fallers

Why Bell Financial, IPD, Megaport, and Resolute Mining shares are falling today

These shares are starting the week in the red. But why?

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Megaport, Pilbara Minerals, Vysarn, and WiseTech shares are falling today

These shares are ending the week in the red. But why?

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Accent, Sayona Mining, Web Travel, and Weebit Nano shares are dropping today

These shares are having a tough time on Thursday. Why are they being sold off?

Read more »

A smartly-dressed man screams to the sky in a trendy office.
Share Fallers

Why Appen, DroneShield, PWR, and Webjet shares are sinking today

These shares are having a tough time on hump day. But why?

Read more »

a car driver sits up and looks alert with wide eyes and an expression of concentration while he holds the wheel of a car.
Share Fallers

Why this ASX All Ordinaries stock just crashed 24%!

Investors are punishing the ASX All Ords company today. Let’s find out why.

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Elders, KMD, Lovisa, and Telix shares are dropping today

These shares are missing out on the good times on Tuesday. But why?

Read more »