In spite of economic challenges looming, brokerage firm Morningstar is confident that travel company Webjet (ASX:WEB) will have a strong fiscal year in 2024 if market conditions remain favorable.
Morningstar forecasts that Webjet’s EBITDA will increase by 40% to A$182 million.
The company is poised to achieve its three-year EBITDA compound annual growth rate projection of 22%, culminating in A$231 million in fiscal 2026, up from A$127 million in fiscal 2023.
Morningstar favors focusing on Webjet’s longer-term maintainable earnings, which are normalizing to pre-pandemic levels following an upturn in the wake of COVID-19.
From the company’s unit WebBeds, which generates nearly 70% of the group’s revenue, Morningstar anticipates short-term growth momentum as demand remains favorable.
As market situations enhance, Morningstar expects that ongoing dividends will be paid starting sometime in the fiscal year 2025 at a ratio approximately 50%, akin to the historical average.
Thus far this year, the company’s stock has increased by 8.4% as of the last close.
Webjet (ASX:WEB) is a global online travel agency specializing in flights, hotels, car hires, and insurance services.