Flight Centre share price lifts off on boosted earnings outlook

ASX 200 investors are bidding up Flight Centre shares following a lift in the company's earning's guidance.

| More on:
A little boy in flying goggles and wings rides high on his mum's back with blue skies above.

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 Flight Centre Travel Group Ltd (ASX: FLT) share price is lifting off today.

Shares in the S&P/ASX 200 Index (ASX: XJO) travel stock closed yesterday trading for $20.871. In early morning trade on Thursday, shares are swapping hands for $21.70, up 4.3%.

This comes after the global travel agency upgraded its 2023 financial year (FY23) guidance.

What's the new earnings outlook?

ASX 200 investors are bidding up the Flight Centre share price after the company boosted its underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) forecast for the 12 months to June 30.

The new guidance is for underlying EBITDA between $295 million and $305 million.

That's up from the prior underlying EBITDA guidance of between $270 million and $290 million. The company noted this represents a major $483 million improvement from the underlying $183 million loss posted in FY22.

Also potentially offering a boost to the Flight Centre share price today is the expectation of some $22 billion in total transaction value (TTV) for FY23. That's up almost 115% year on year. And it represents the second-best full-year result, beaten only by FY19's $23.7 billion in TTV.

However, FY23 is poised to set a new record for global corporate TTV, which is forecast to come in at $11 billion. That's more than 20% above the prior record of $8.9 billion set in FY19.

Global leisure TTV is forecast to come in at around $10 billion.

Commenting on the forecast results sending the Flight Centre share price higher today, managing director Graham Turner said he was pleased with the company's "continued recovery as demand has generally rebounded solidly across both our leisure and corporate travel businesses".

Turner noted that Flight Centre delivered record TTV "while investing significantly for the future by securing large volumes of new accounts, expanding our sales force and introducing innovative new platforms and products for our customers, which should lead to stronger returns in the years ahead".

Commenting on that outlook Turned added:

Our expectations are that leisure travellers will continue to prioritise holidays and experiences over other areas of discretionary spending, as we have seen in the past and as evidenced by the consistent year-on-year growth in outbound travel in large and important markets like Australia.

In corporate, we expect that the large volume of new business that we continue to win – both from competitors and accounts that were previously unmanaged – will offset the impact on TTV flowing from lower-than-normal client spend.

Flight Centre share price snapshot

The Flight Centre share price has been a strong performer in 2023, up 51% year to date.

Motley Fool contributor Bernd Struben 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 Flight Centre Travel Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Travel Shares

Bored woman waiting for her flight at the airport.
Travel Shares

Why are Web Travel shares tumbling 6% today?

Its suspension is over. What's going on with this travel stock?

Read more »

A woman looks up at a plane flying in the sky with arms outstretched as the Flight Centre share price surges
Travel Shares

The Qantas share price has flown 66% higher in 2024, this top broker thinks it can gain more altitude

Qantas shares may not be finished rising.

Read more »

a man holds his arms out and shrugs his shoulders as if indicating he doesn't know the answer to a question he's been asked.
Travel Shares

Why is Web Travel stock such a hot topic today?

This travel stock isn't going anywhere today. Why isn't it moving?

Read more »

Man sitting in a plane seat works on his laptop.
Travel Shares

Why this ASX travel share is grounded two days before results

Investors now wait in anticipation.

Read more »

A corporate-looking woman looks at her mobile phone as she pulls along her suitcase in another hand while walking through an airport terminal with high glass panelled walls.
Travel Shares

This ASX travel share is 'going to take off' after falling 30%

Back your bags.

Read more »

A woman sits crossed legged on seats at an airport holding her ticket and smiling.
Travel Shares

Down 23% in a month, why this ASX 200 stock is an 'attractive opportunity'

After falling hard, a top fund manager is seeing an opportunity with this stock.

Read more »

A line of people sitting at a long desk in an annual general meeting
Travel Shares

Why today is a big day for Flight Centre shares

Why is everyone talking about Flight Centre shares today?

Read more »

A woman reaches her arms to the sky as a plane flies overhead at sunset.
Travel Shares

Why this fund manager still thinks Qantas shares are a cheap buy

One expert still has a lot of belief in Qantas shares.

Read more »