FRANKFURT (dpa-AFX) - A complete change of opinion by British investment bank Barclays sent Tui shares on a recovery course on Friday. The travel group's shares rose 4.7 percent to 6.48 euros by late morning, putting them at the top of the MDax. The index of medium-sized stocks rose by one percent.
Shares in the travel and aviation sector, such as Tui, had suffered significantly at the end of last week in particular due to the outbreak of war between Israel and Iran. The reasons for this were the expected restrictions on travel due to the armed conflict and the rise in oil prices, which fueled fears of higher kerosene costs.
However, Barclays analyst Andrew Lobbenberg caused a jump in the share price by upgrading Tui shares from "underweight" to "overweight," skipping the intermediate "equal weight" rating. With his new assessment, he now expects the shares to outperform other stocks in the sector over the next twelve months. The expert raised his target price from 7.70 to 11.00 euros.
Lobbenberg changed his valuation model for Tui and is now focusing on analyzing the expected cash flow. From this perspective, Tui shares are not expensive, even taking into account his below-average estimates. Based on the sum of all parts of the company, they are even very cheap.
The Barclays expert spoke of Tui's unique, albeit complex, business model with earnings momentum, which is supported by robust demand for package holidays. Given the strong demand for leisure travel, buoyant travel spending in the UK and what is likely to be successful growth in the cruise and hotel segments, Tui is "a less error-prone company than many investors perceive," he said./la/ag/nas
