Why this top broker rates the Webjet (ASX:WEB) share price a buy

Here's what this broker thinks of the Webjet share price…

| More on:
A woman smiles as she crosses the tarmac, happy to be boarding a plane at the airport and travelling again.

Image source: Getty Images

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

The Webjet Limited (ASX: WEB) share price has been caught up in the market selloff on Wednesday.

In morning trade, the online travel agent's shares are down 2.5% to $6.27.

Despite this, the Webjet share price is still up 22% since the start of the year.

Is the Webjet share price in the buy zone?

According to a note out of Goldman Sachs, its analysts remain positive on the company.

This morning's note reveals that the broker has retained its buy rating and $6.40 price target on its shares.

However, it is worth noting that based on the current Webjet share price, this implies only modest upside of 2.1% for its shares over the next 12 months.

What did Goldman say?

Goldman held a virtual investor meeting with Webjet's management this week. It came away from that meeting feeling positive on the company's recovery from the pandemic.

One key takeaway from the meeting was the different speeds in which certain markets are recovering from COVID-19.

Goldman said: "Sentiment and recovery in the rest of the world is significantly different from the ANZ region. Europe and Americas are in the most advanced stages of recovery, while the Middle East and Africa is only beginning to recover, and Asia remains a laggard."

Its analysts also highlighted some positive commentary around the key WebBeds business.

The broker said: "The team has made 3-4 new hires in the [Americas] region and has been focused on developing the business capabilities organically in the region. 90% of the market is domestic and Webbeds is working on this opportunity. Previously Trans Atlantic was 2/3rd of this region's business and therefore the November catalyst of USA reopening is important, although the domestic opportunity implies that getting to pre-pandemic levels should not be difficult."

Trading conditions are also looking favourable in Europe for WebBeds. Especially given how some of its rivals failed to make it through the pandemic.

Goldman said: "Competition remains lower in the European market, as the group has not seen some companies who entered hibernation during COVID recover, and smaller players trying to enter new markets to disrupt is also lower. Management expects to look at M&A opportunities if it offers ancillary opportunities rather than to achieve scale."

All in all, the broker came away feeling positive on Webjet's recovery and has retained its buy rating.

It concluded: "Overall, the feedback from this meeting was largely positive with key internal process targets remaining on track to deliver, and travel recovery remaining positive on the international front. While the Webjet OTA and Online Republic businesses remain impacted by the shutdowns in the ANZ region, management remains confident of Webjet's ability to grow market share as reopening recovers."

Should you invest $1,000 in Altium right now?

Before you buy Altium shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Altium wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Broker Notes

A man has a surprised and relieved expression on his face. as he raises his hands up to his face in response to the high fluctuations in the Galileo share price today
Broker Notes

Leading broker puts buy rating on Zip shares

Big returns could be on offer for investors according to its analysts.

Read more »

gaming asx share price rise represented by slot machine paying jackpot
Broker Notes

What does Macquarie expect from Aristocrat Leisure shares when it reports on 14 May?

Here's what the broker is expecting from this gaming technology company next week.

Read more »

Broker written in white with a man drawing a yellow underline.
Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys this week.

Read more »

A man holding a cup of coffee puts his thumb up and smiles while at laptop.
Broker Notes

Goldman Sachs says these ASX 200 stocks are strong buys

The broker is feeling very bullish about these stocks. But why?

Read more »

A bland looking man in a brown suit opens his jacket to reveal a red and gold superhero dollar symbol on his chest.
Broker Notes

Bell Potter names more of the best ASX 200 stocks to buy in May

These stocks could be best buys this month according to the broker.

Read more »

A financial expert or broker looks worried as he checks out a graph showing market volatility.
Broker Notes

Leading brokers name 3 ASX shares to buy today

Here's why brokers believe that now could be the time to snap up these shares.

Read more »

Man looking upwards contemplating which shares to buy
Broker Notes

CSL shares have climbed 10% since 11 April. Is it too late to buy?

What are analysts saying about this biotech giant after its recent rally? Let's find out.

Read more »

Excited couple celebrating success while looking at smartphone.
Broker Notes

Bell Potter names the best ASX 200 stocks to buy in May

The broker is feeling bullish on these names this month. Let's find out why.

Read more »