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On Monday, Morgan Stanley (NYSE:MS) downgraded Corporate Travel Management (CTD:AU) (OTC:CTMLF) from Overweight to Equalweight, adjusting the price target to AUD11.80 from the previous AUD15.30. The decision reflects concerns about the near-term earnings visibility and conviction, suggesting a wider range of potential valuations for the company’s stock.
Stifel analysts cited a realistic possibility of earnings missing their significantly reduced forecasts for fiscal year 2026. Consequently, they have lowered their earnings per share (EPS) estimates for fiscal years 2025 to 2027 by 28-36%. The new price target represents a 23% decrease from their prior target.
Despite the downgrade, Morgan Stanley acknowledged Corporate Travel Management’s promising long-term earnings and total shareholder return (TSR) performance. The analysts praised the company’s strong founder alignment and its effective management of shareholder value during the Covid pandemic.
The firm also recognized Corporate Travel Management’s advantageous position as a potential share-gainer with global coverage in the structurally compelling corporate travel segment. Nonetheless, the lack of conviction regarding the earnings trajectory over the forecast period prompted the downgrade.
In summary, while Morgan Stanley sees value in Corporate Travel Management’s long-term strategy and market position, the immediate uncertainties surrounding earnings forecasts have led to a more cautious stance on the company’s stock for the near future.
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