How lower interest rates could send this beaten down ASX All Ords stock flying

A leading expert says this sold-off ASX All Ords stock is 'well placed for growth'.

| More on:
A family walks along the tarmac towards a plane representing more people travelling as ASX travel shares recover

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

ASX All Ords stock Webjet Group (ASX: WJL) has had a tough run since the company 's demerger from Web Travel Group Ltd (ASX: WEB) last September.

How tough?

Well, since market close on 27 September, the Webjet share price has plunged 42%.

For some context, the All Ordinaries Index (ASX: XAO) is down 2.2% over this same period.

The ASX All Ords stock has been struggling as high interest rates and sticky inflation have impacted demand for its services.

At Webjet's half year results in November (its first report as an independent company), management noted that "ongoing cost of living pressures continue to subdue demand for travel, particularly for domestic flights".

But with interest rates widely expected to come down in 2025, perhaps as early 20 May when the Reserve Bank of Australia (RBA) next meets, now could be an opportune time to buy the very deep dip on Webjet shares.

That's according to Red Leaf Securities' John Athanasiou (courtesy of The Bull).

Why this ASX All Ords stock is a buy

"WJL was formed in September 2024 after Webjet Limited shareholders approved a demerger to enable two listed parent companies," said Athanasiou, who has a buy recommendation on the ASX All Ords stock.

Athanasiou explained:

WJL operates Australia and New Zealand's online travel agent (OTA) business. WJL also operates GoSee, a global motor home and car rental e-commerce site and Trip Ninja, a travel technology business.

And he's bullish on Webjet's business reset, noting, "This reset is aimed at unlocking value and improving agility."

As for interest rates cuts and the growth outlook for Webjet shares, Athanasiou said:

A strategic re-investment in brand and customer experience amid a potential tailwind from lower interest rates that encourages travel leaves WJL well placed for growth in the long term.

What's been happening with Webjet since the demerger?

With the crashing Webjet share price having also materially lowered the company's market cap, Webjet was removed from the S&P/ASX 300 Index (ASX: XKO) on 24 March as part of the S&P Dow Jones Indices March quarterly review.

There hasn't been much other news out from Webjet post its demerger aside from its initial half year results.

Commenting on the outlook for the ASX All Ords stock at the time, Webjet managing director Katrina Barry said:

As outlined in our demerger investor presentation, we have clear and robust strategic priorities to deliver growth and enhance our leadership positions in online travel marketplaces.

Our planned initiatives are progressing well with several showing exciting potential and we are accelerating investment in technology platforms and other key growth drivers. With the demerger now behind us, Webjet Group is solely focused on growth…

And according to Red Leaf Securities' Athanasiou, the ASX All Ords stock could be set to deliver on that growth, potentially with a little help from lower interest rates.

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 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

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

Web Travel share price rockets 13% on market leading full-year growth

Investors are sending Web Travel shares soaring today. Here’s why.

Read more »

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

$10,000 invested in Qantas shares 5 years ago is now worth

Let's see what happened if you were brave and bought the Flying Kangaroo's shares in 2020.

Read more »

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

Why have Qantas shares outperformed Flight Centre shares by more than 100% over the past 12 months?

The two share prices are travelling in opposite directions.

Read more »

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

Qantas share price slips amid looming $121 million fine

Qantas continues to face legal issues stemming from the Covid pandemic years.

Read more »

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

Up 78% since April, why is the Webjet share price taking off again today?

Webjet shares have soared 78% since 4 April and are lifting off again today. But why?

Read more »

a young woman looks at here phone as she strides out in an airport dragging her wheelie bag behind her and smiling widely.
Travel Shares

Would I buy Qantas shares right now?

This ASX travel share has flown higher. Is it a buy?

Read more »

a woman drawing image on wall of big fish about to eat a small fish
Mergers & Acquisitions

Guess which ASX All Ords stock just received a takeover offer

A private equity firm has its eyes on this stock.

Read more »

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

Qantas shares just hit $10. Can they fly higher?

Will Qantas shares reach a new all-time high in 2025?

Read more »