Home Sports Why Flight Center’s Heavily Shortened Share Price Could Do Better: Macquarie

Why Flight Center’s Heavily Shortened Share Price Could Do Better: Macquarie


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The Flight Center Travel Group Ltd (ASX: FLT) share price today rose by 4.38% to 15.24 dollars.

It was a rocky road ASX Travel Shares since the pandemic began, and the impact continues today.

Add to that height inflation and interest rates pushing up the cost of living and discouraging consumers from buying goods and services on their own, and rising energy prices making air travel more expensive, you could say ASX travel stocks have some headwinds.

In light of this, many investors feel uncertain about travel stocks. This is one of the reasons why Flight Center remains the most closed share on the ASX today.

As my Fool colleague James reported yesterday, Flight Center has a short interest of 14.75%.

The broker says the AGM could boost Flight Center’s share price

In accordance with Australian Financial Review (AFR)Macquarie believes Flight Center could be among the ASX 100 stocks to benefit from mini-trading updates at the upcoming annual general meeting (AGM).

The broker believes that AGMs can be a positive catalyst for share prices in companies such as Flight Centre, Coles Group Ltd (ASX: QTY), Endeavor Group Ltd (ASX: EDV), Downer EDI Limited (ASX: DOW), Charter Hall group (ASX: CHC), and Origin Energy Ltd (ASX: ORG).

According to the article:

Macquarie said unemployment remained very low and “consumer spending has not fallen as feared” in Australia, which could also help tourism groups such as Flight Center.

The Flight Center will hold its general meeting on November 14.

What’s the outlook for ASX travel stocks?

An update from Qantas last week, which saw its share price soar 12%, could be a positive sign for the wider travel sector.

As my fellow fool Tristan wrote:

Qantas has revealed that demand for travel remains “strong” across all categories. This bodes well for the wider ASX travel shares sector. Business income is more than 100% of pre-Covid-19 levels, while consumption of leisure income has “increased further” to more than 130%.

… Qantas noted that the wider operating environment remained “challenging” with high fuel prices and high inflation, as well as higher interest rates hurting consumer confidence.

Even so, the airline believes that “strong demand indicates that people are prioritizing travel spending over other categories,” allowing higher fuel costs to be offset by fares.


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