The City has maintained a 'hold' rating on TUI AG (LSE:TUI) prior to the German travel leader’s trading update on Tuesday, 19 September.
TUI swung into profit in the third quarter following a rebound in travel and pricing, though forward booking remains a source of anxiety for investors, noted Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.
The FTSE 250 group is also expected to log a €25 million hit due to the devastating summer fires in Rhodes.
Nonetheless, “travel giant, TUI, has seen impressive momentum so far this year”, said Lund-Yates, who noted that travel and pricing tailwinds have led to a 19% year-on-year turnover uptick.
“That suggests investors could be in for a strong final instalment for the full year,” she predicted. “With that in mind, there will be a strong focus on free cash flow after it dropped across the first nine months of the year.”
On that note, TUI was still in debt as of 30 June to the tune of €2.2 billion. Though this was a €1.1 billion improvement year on year, stakeholders will still be keen to chart progress on this front.
Analysts expect to see a 20.5% uptick in turnover for the financial year, with a 49%-plus EBITDA improvement.
TUI shares are down by a third year to date, and were swapping for 482.5p at the time of writing.