Can TUI Continue Its Positive Momentum?

TUI are set to report their first-quarter trading update on Tuesday, following a positive set of final results back in December.

In the travel company’s prior results the group returned to profit following a difficult few years due to the pandemic. A close eye will be kept on whether the firm can continue this positive trend moving forward.

TUI previously stated it planned to operate a programme for winter 2022/23 close to pre-pandemic levels and current bookings were at 134% of its 2021/22 winter levels. Across several of its segments, the group anticipates positive results against a weaker previous year comparative.

As a result, positive momentum has continued into FY23. Volumes and booked occupancy are well-ahead of its prior years as holiday recovery remains strong despite a battle with soaring inflation.

Source: Semrush

The recovery in travel is evident from TUI’s online traffic. Its organic traffic is currently at record highs according to Semrush, and more than doubled since its lows shown in 2021. In addition, recent positive results from other European airlines reaffirm the recovery in this sector.

However, the continued squeeze on household income will continue to test European carriers and potentially cause headwinds across 2023. Therefore, the group’s guidance will be vital in providing any uncertainties or doubts for FY23.

TUI shares have gained almost 30% so far this year. Deutsche Bank analyst Andre Juillard recently lowered the firms price target to 140p from 156p, although kept a Hold rating on its shares.

Source: TradingView

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