Deutsche Bank has positively adjusted its target price for TUI AG (LSE:TUI) following the publication of the travel company's fiscal year 2023 results.
TUI’s results highlight a robust and positive operating trend within the company.
Looking forward to the fiscal year 2024, the group is guiding towards a revenue increase of at least 10% and an EBIT progression of a minimum of 25%.
Further bolstering this optimistic outlook, TUI outlined its medium-term ambitions of achieving an EBIT compound annual growth rate (CAGR) between 7-10% and maintaining a net debt to EBITDA ratio well below the threshold of 1.0x.
In response to this guidance, Deutsche Bank has revised its model, elevating its top-line and profitability estimates.
These revised estimates are now approximately 3-4% higher than the Bloomberg consensus, particularly more pronounced at the net level.
A key indicator of TUI's financial health, the adjusted post-IFRS-16 margin, is projected to reach around 6% by the fiscal year 2026, a notable increase from the 4.8% recorded in the 2023 financial year.
This represents an improvement of 120 basis points over three years.
TUI is a buy with a 900p price target for London-listed shares.