Travel Giant TUI Posts Quarterly Profit of €6 Million, Defying Expectations
Travel giant TUI has reported a surprising quarterly profit of €6 million, surpassing expectations as travel demand picks up. This marks a significant turnaround from the same quarter last year when the company reported a net loss of €153 million.
The impressive fiscal first-quarter revenue reached a record-breaking €4.3 billion, reflecting a 15% increase from the previous year. This growth was driven by higher demand and increased prices and rates. As a result of this positive news, TUI shares rose in early trade in Europe.
TUI CEO, Sebastian Ebel, expressed confidence in the company’s progress and stated that they are gaining customers and experiencing growth. He also noted the strong economic development across all areas of the group due to people’s high willingness to travel.
Looking ahead, TUI expects to continue its growth momentum, forecasting a minimum 25% increase in operating profit for the 2024 financial year. Additionally, the company aims for a compound annual growth rate of 7-10% over the medium term. During the three-month reporting period, TUI recorded a rise in guests traveling with them, reaching 3.5 million compared to 3.3 million the previous year.
Despite TUI’s positive quarterly performance, the company’s share price is still seen as undervalued. The stock is currently trading at just 0.2 times enterprise value to sales and at a 5.3 times estimated price to earnings ratio for 2024.
In other news, TUI shareholders will vote on whether the company should maintain its dual listing between Frankfurt and the U.K. or opt for a full listing in Germany. This decision comes after the board’s recommendation, citing a decline in liquidity on U.K. equity markets in recent years.
Analyst comment
Positive news: TUI posts a quarterly profit of €6 million, surpassing expectations and marking a significant turnaround from last year’s net loss. Impressive revenue increase and growth in customers. Market outlook: TUI’s strong performance and growth momentum are expected to continue, with a minimum 25% increase in operating profit forecasted for 2024 and a compound annual growth rate of 7-10% over the medium term. TUI’s undervalued share price presents an opportunity.
