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On Tuesday, JPMorgan analysts revised their stance on Flight Center Travel Group Ltd (FLT:AU) (OTC: FGETF), upgrading the company's stock from Neutral to Overweight and adjusting the price target to AUD20.00, up from the previous AUD18.80. The analysts cited several factors for the optimistic outlook, including a more favorable view for the year 2025 across Flight Center's Leisure and Corporate segments.
The upgraded rating comes as industry feedback indicates that the deflation in airfare ticket prices, which reached a low in the second half of the calendar year 2024, has begun to reverse. This trend, coupled with a global lag in airline fleet capacity compared to demand, is expected to potentially drive up Total (EPA:TTEF) Transaction (JO:TCPJ) Value (TTV) in the second half of 2025 and into the fiscal year 2026.
Flight Center's stock is also considered to be trading at a relatively undemanding forward price-to-earnings ratio of 13 times, which is notably below the historical average for both the company and the industry. This valuation suggests that the stock may offer a compelling entry point for investors.
The analysts have placed Flight Center on Positive Catalyst Watch ahead of the company's first-half 2025 results, which are scheduled to be announced on February 26, 2025. This denotes heightened anticipation of positive developments that could influence the stock's performance.
Earnings expectations for Flight Center have been recalibrated following the company's Annual General Meeting in November 2024, setting what JPMorgan analysts consider a low bar for consensus expectations. The combination of these factors has led to the upgrade and the establishment of a new price target, signaling a positive outlook for Flight Center's stock in the near term.
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