Flight Centre (FLT) | Quant BUY ($55) - Published 22nd Nov 2013 - Nothing much has changed in this quality global travel growth story | We have changed our FLT rating from Quant SELL to Quant BUY with Quant Target Price (QTP) of $55. FLT is a quality global travel company that has been able to maintain double digit growth outlook since the GFC despite tough travel industry conditions. With domestic tourism recovery expected and robust departure volume holding in recent months despite falling currency, FLT should trade at higher multiples after the AGM comments confirmed the solid start to the financial year. (VIEW LINK)
Quant targets are driven by relative valuation trends and macro thematics. Global growth expected to remain low while travel industry expected to remain stronger with higher currency and consumers looking for experience spending. Downgrade matters if its structural, but cyclical downgrades like this is no reason to change targets. FLT remains a top quality global growth travel stock with solid growth outlook. We expect FLT to hit $55 in the next 12mths and reach over $60 in 24mth assuming the business model and the global macro outlook remains as we expect now.
Mathan, I note that FLT had a little run up despite the recent mild earnings downgrade. Do events such as the downgrade have an impact on quant targets? If so have you adjusted this latest update?