Why this ASX travel share is grounded two days before results

Investors now wait in anticipation.

| More on:
Man sitting in a plane seat works on his laptop.

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

Webjet Ltd (ASX: WEB) shares have been placed in a trading halt on Monday, leaving investors wide-eyed just days before the company's highly anticipated first-half FY25 results.

The company may need to make adjustments to its prior year financial statements, which have many moving parts given the carve-out of WebJet Group Ltd (ASX: WJL) from core operations this year.

Shares are on ice until the company makes the necessary amendments. Till then, investors must wait for their Scooby Snacks.

Created with Highcharts 11.4.3Web Travel Group Limited PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

Why is this ASX travel share in a trading halt?

The ASX travel share is on ice after a company-requested trading halt before the market, effective from today.

This was initiated to allow Webjet to manage its disclosure obligations regarding adjustments to prior year financial statements.

The company emphasised that these changes are unrelated to its H1 FY25 results or future outlook, which remains unchanged.

The trading halt is requested to enable Web Travel Group to manage its disclosure obligations in relation to potential adjustments to its prior year financial statements.

This is not expected to impact the company's 1H25 results and outlook.

The ASX travel share will remain in a trading halt until the company provides further clarity or until trading resumes on 20 November, whichever comes first.

This pause in trading has sparked curiosity, as Webjet has recently gained considerable attention for its positioning in the global travel market.

Is Webjet a buy despite recent turbulence?

Despite the short-term uncertainty, many analysts remain bullish on Webjet's long-term growth trajectory.

The ASX travel share operates WebBeds, a business-to-business (B2B) hotel booking platform, which accounts for a significant share of its business.

The company's recent spin-off of its online travel agency (Webjet Group) into a separate listing was supposed to unlock value for shareholders while strengthening the company's asset base and improving profitability.

Goldman Sachs remains optimistic about Webjet's future.

In a recent note, the broker maintained a buy rating with a $6.70 price target. With shares trading at $4.50 at the time of writing, this implies a potential upside of more than 48%.

The broker highlights Webjet's growth in the US and Asia-Pacific (APAC) markets. It projects total transaction value (TTV) of $5 billion by FY25 and $10 billion by FY30.

However, Goldman also warns that revenue margins may compress slightly as Webjet expands into lower-margin markets.

Less flesh to put on the skeleton, it says.

Meanwhile, consensus rates the ASX travel share a buy, according to data obtained from CommSec.

Foolish takeout

Investors will be watching closely for updates on the financial adjustments. More so, how they might influence Webjet's operations moving forward.

For now, analysts seem to agree that Webjet offers value at current levels. This could make it one potential ASX travel share to consider.

In the last 12 months, the stock is down nearly 22%.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has no position in any of the stocks mentioned. 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

Woman on a tablet waiting in for her flight in an airport and looking through a window.
Travel Shares

Virgin Australia vs Qantas shares: Which is the best buy?

Competition in Australia's aviation market is heating up.

Read more »

A female cabin crew member on a place looks like she has a headache.
Travel Shares

Why this expert is calling time on Virgin Australia shares

A leading expert is calling time on Virgin Australia shares. But why?

Read more »

Couple at an airport waiting for their flight.
Travel Shares

Macquarie increases price target for Qantas shares

Qantas shares hit a new all-time high today.

Read more »

Happy woman trying to close suitcase.
Travel Shares

Guess which ASX travel stock Macquarie just named as its top pick with 32% upside?

While Macquarie sees value across the sector, it named a clear favourite. 

Read more »

A man in a dark blue suit walks through an airport past floor-to-ceiling windows with a Qantas plane flying in the distance
Travel Shares

Up 16% this year, does Macquarie rate Corporate Travel Management shares a buy, hold or sell?

Does the travel stock have further to fly?

Read more »

A group of young people lean over the rails overlooking Sydney's Circular Quay and check out the sights of the city around them.
Travel Shares

Can these two battered ASX travel shares bounce back?

Ahead of important tourism data this week, these two travel companies could be buy low candidates. 

Read more »

Man sitting in a plane looking through a window and working on a laptop.
Travel Shares

Did Flight Centre, Air New Zealand, or Qantas shares fly highest in FY25?

How did these ASX travel shares perform last financial year?

Read more »

Man waiting for his flight and looking at his phone.
Travel Shares

The Virgin Australia share price just slipped back below IPO levels. Should I buy shares today?

A leading expert offers his forecast on the struggling Virgin Australia share price.

Read more »