Deutsche Bank recommended sticking with Tui shares as it initiated coverage of the world’s biggest travel and tourism company.
The bank gave Tui’s shares a ‘hold’ rating with a price target of 4.40 or 375p.
The Anglo-German tour operator has been hit hard by Covid-19 restrictions, which have crushed the market for foreign holidays. In March the company trimmed its capacity for the peak summer months to 75% of 2019 levels from 80% though it said bookings were encouraging and showed strong pent-up demand for travel.
“Tui is a fully integrated leader in the tour operator business in Europe, with the markets and airlines divisions funnelling traffic to the holiday experiences divisions,” Deutsche said in a note to clients. “Tui is a highly seasonal business, with almost all of its full-year profits earned in Q4 (Jul-Sep), giving the group’s earnings a skewed risk profile if the environment remains as it is now.”
Shares of Tui fell 1.1% to 392.8p in London at 10:49 GMT.
