TUI Group stock climbs on FQ1 EBIT beat; Jefferies remains cautious

  • Stock Market News
TUI Group stock climbs on FQ1 EBIT beat; Jefferies remains cautious
Credit: © Reuters.

Shares of TUI Group (TUIFF) rose 3% in Frankfurt after the travel giant revealed better-than-expected FQ1 EBIT and revenue.

Specifically, the company reported an underlying EBIT of €6 million, significantly better than the forecasted loss of €113 million. Net loss in the quarter amounted to €122.6 million, marking a 52% improvement year-over-year.

Revenue saw a significant increase, rising by 15% YoY to €4.30 billion, exceeding the estimate of €4.17 billion.

This performance was supported by an increase in guest numbers, with 3.5 million travelers choosing TUI in the three-month period, up from 3.3 million the previous year.

Looking ahead, TUI remains optimistic, maintaining its forecast for revenue growth of at least 10% and an increase in underlying EBIT of at least 25%.

As for the medium-term goals, TUI aims for an average EBIT growth of approximately 7%-10% CAGR.

The earnings report comes ahead of an annual general meeting, where TUI shareholders will decide on whether the company will delist its shares from the London Stock Exchange in favor of a full listing in Germany.

This decision is driven by the board's observation of a substantial decline in liquidity within the U.K. equity markets in recent years. TUI, which is currently dual-listed in Frankfurt and the U.K., notes that only 10% of its shares are held in London.

Despite an “undemanding valuation” and a reshaped balance sheet, Jefferies analysts said they still observe “ reinvestment risk in all key business units.”

“In an environment of macro uncertainty, we prefer share winners: Jet2 (Buy) trades on a similar c45% discount to history with a better-invested offer and clearer growth runway,” analysts wrote.

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