Despite being the most shorted share on the Australian share market, the Flight Centre Travel Group Ltd (ASX: FLT) share price has been on fire this year.
Since the start of 2023, the travel agent's shares have risen an impressive 26%.
Investors appear to be betting on a strong performance from Flight Centre in FY 2023.
This could make it worth watching Flight Centre shares closely next week when the company releases its half year results on 22 February.
Ahead of the release, let's take a look at what the market is expecting.
What is the market expecting from Flight Centre?
Well, the good news is that a lot is already known about Flight Centre's performance during the half.
That's because earlier this month the company released a trading update to support its capital raising and revealed a performance ahead of consensus estimates.
Flight Centre revealed that it expects to report total transaction value (TTV) of $9.9 billion, group revenue of $1.0 billion, and group underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $95 million.
However, there are a few things that could be worth looking out for outside these metrics.
For example, according to a note out of Morgans, its analysts are looking forward to digging deeper into its earnings.
The broker suspects that the company's Corporate business could be delivering the goods and contributing strongly to its earnings. It commented:
The 1H23 beat to consensus was led by the strong profitability of Corporate. This business is on track to deliver record TTV in FY23 (MorgansF is ~A$11.6bn vs pre-COVID of A$9.0bn). November EBITDA was in line with the monthly run rate implied at the AGM (A$14.5m/month). December EBITDA was lower given usual seasonality. If we conservatively assume December EBITDA was A$7.5m, this would equate to 1H23 Corporate EBITDA of ~A$80m. FLT is continuing to gain market share through high customer retention rates and material new account wins.
And given how Flight Centre's earnings are expected to be heavily weighted to the second half, Morgans is likely to be looking out for another update on its guidance. It added:
FLT has provided FY23 EBITDA guidance of A$250-280m. This was below Morgans previous forecast of A$289.5m. However it was largely at the midpoint of FactSet consensus of A$266.3m. This guidance is prior to any benefits from the acquisition. The midpoint of guidance implies a 35%/65% 1H vs 2H split, which is broadly in line with FLT's historical seasonality.
