Goldman says Webjet (ASX:WEB) share price is a buy with 25% upside

Time to buy Webjet shares? This broker thinks it is…

| More on:

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 come under significant pressure again in recent weeks.

So much so, the online travel agent's shares have lost 16% of their value since this time last month.

This has been driven partly by concerns that the Omicron variant of COVID-19 could derail the travel market.

A happy woman flies with arms outstretched on her boyfriend's back on the beach at dusk.

Image source: Getty Images

Is the Webjet share price good value now?

While the weakness in the Webjet share price has been disappointing for shareholders, the analysts at Goldman Sachs appear to believe it could be a buying opportunity.

According to a note out of the investment bank, the broker has retained its buy rating but trimmed its price target slightly to $6.90.

Based on the current Webjet share price of $5.52, this suggests there is potential upside of 25% for investors.

What did the broker say?

Goldman was reasonably pleased with the company's recent half year results release.

It commented: "The 1H22 results for WEB was slightly below GSe at the EBITDA level but positive in terms of cash generation and a few other qualitative markers that we look at as important for WEB through the recovery, including the Americas region."

Looking ahead, the broker doesn't appear concerned by the Omicron variant at this stage.

Its analysts explained: "We note that the Omicron variant has resulted in some border restrictions being reintroduced globally. However, given the limited exposure for WEB towards the Southern African regions, we make no changes to our estimates on this basis."

In light of this, its analysts remain very positive on Webjet's long term outlook and continue to see it as a reopening winner.

Goldman concluded: "Overall, WEB continues to make progress in the right direction through the reopening with the 20% cost savings target remaining intact for the Webbeds division. We continue to see a long term growth story in this business and view WEB as net beneficiaries of the post COVID recovery. We slightly lower our 12m Target Price to A$6.90 (vs. A$7.00 prior) and maintain our Buy rating on WEB."

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 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

Businessman working and using Digital Tablet new business project finance investment at coffee cafe.
Broker Notes

Buy, hold, sell: Cochlear, South32, and Westpac shares

Analysts have given their verdict on these popular shares.

Read more »

A young man goes over his finances and investment portfolio at home.
Broker Notes

Buy, hold, sell: ANZ, Breville, and Macquarie shares

Is Morgans bullish or bearish on these shares in April? Let's find out.

Read more »

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

Top brokers name 3 ASX shares to buy next week

Brokers gave buy ratings to these ASX shares last week. Why are they bullish?

Read more »

Man sitting in a plane seat works on his laptop.
Broker Notes

Down 34% in 2026, are Virgin Australia shares a good buy today?

A leading analyst delivers his outlook for Virgin Australia’s beaten-down shares.

Read more »

Red buy button on an Apple keyboard with a finger on it.
Broker Notes

Brokers name 3 ASX shares to buy right now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A smiling woman holds a Facebook like sign above her head.
Broker Notes

Why these ASX shares are rated as buys in April

Let's see what makes them bullish on these names right now.

Read more »

Australian dollar notes in the pocket of a man's jeans, symbolising dividends.
Broker Notes

Are CBA shares still a good buy for passive income?

A leading analyst delivers his verdict on CBA’s passive income appeal.

Read more »

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

Morgans names 2 ASX shares to buy and 1 to accumulate

What is the broker recommending investors do with these shares?

Read more »