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On Friday, Jefferies analyst John Campbell upgraded Corporate Travel Management (CTD:AU) (OTC:CTMLF) stock rating from Hold to Buy, while reducing the price target to AUD14.20 from AUD17.50. The revision follows the company’s trading update, which revealed an expected revenue loss of AUD30 million by FY25. This loss is primarily attributed to the impact of tariffs in the US and Asia, with no offsetting cost reductions, leading to an AUD30 million EBITDA decline, which represents a 15% miss on the forecasted FY25 EBITDA.
Despite the revenue challenges, there were positive developments in Europe where performance remained unchanged. Additionally, Corporate Travel Management secured AUD700 million in new client Total (EPA:TTEF) Transaction (JO:NTUJ) Value (TTV) after February, with half of this coming from Europe. This new business is a significant win for the company amidst the revenue loss.
To date, Corporate Travel Management has maintained its cost base. However, Campbell notes that if there is no relief from the revenue loss, the company will need to right-size its operations. Jefferies has adjusted its FY25 Earnings Per Share Adjusted (EPSA) estimates downward by 20%, but assuming some recovery and the new AUD700 million TTV, the FY26-27 EPSA is projected to decrease by only 2%.
The update from Jefferies reflects the challenges Corporate Travel Management is facing due to external tariff impacts, but also acknowledges the company’s resilience through new client acquisition and stable performance in Europe. The revised price target and rating upgrade indicate Jefferies’ outlook on the company’s stock performance in light of recent developments.
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