By Michele Maatouk
Date: Monday 22 Jul 2019
(Sharecast News) - Tui shares rallied on Monday as Stifel resumed coverage of the stock at 'buy' with a 940p price target offering a 32% total shareholder return.
Stifel said the strong market reaction to the company's aborted profit guidance has left the shares looking oversold, with free cash flow inflection underpinning a 9% dividend yield and sum-of-the-parts valuation support.
"Near term focus will be on the second-half profit recovery, which still carries risks, reflecting a challenging backdrop for the industry," it said.
"Tui's vertically integrated business model leaves it well placed to adapt to industry change and possible consolidation, as peak capex gives way to a third wave of tech-led initiatives."
At 1215 BST, the shares were up 3.6% at 833.20p.
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