Webjet to Soar as Travel Rebounds, According to Goldman
Goldman Sachs has upgraded its rating on Webjet (ASX:WEB) from Neutral to BUY and raised its 12-month target price from $7.70 to $8.30. The current price of Webjet is $6.33. Webjet operates two main businesses: WebBeds, a hotel bed B2B provider, and an Australian online travel agent (OTA) business with a leading domestic online market share of approximately 40%. Goldman Sachs believes that as the travel market recovers, Webjet will demonstrate strong cash generation, leading to a rise in its share price. The resumption of international travel in the Asia Pacific region is expected to boost demand for Webjet’s services. Goldman Sachs has identified three areas of recovery upside that are still undervalued by the market. Firstly, there are signs of acceleration in international and APAC recovery. Secondly, hotel demand remains robust, supported by international recovery. And thirdly, corporate travel is expected to recover to pre-COVID levels by 2024. Goldman Sachs believes that Webjet is better positioned than Flight Centre and Corporate Travel to benefit from the return of international long-haul travel through its WebBeds business. The firm also expects Webjet to achieve improved cost leverage from the consolidation of its operating ecosystems into one more efficient technology ecosystem. In the OTA segment, Goldman Sachs believes that Webjet’s business is well-exposed to the right channels with the ongoing shift towards digital bookings likely to aid its growing market share. However, increased competition from global OTAs and domestic physical travel retailers could result in higher marketing expenses and pose a downside risk to profitability. Despite this, Goldman Sachs sees the recent fall in Webjet’s share price as an attractive entry point for investors.
Life360 Offers Great Value Compared to Peers, Says Goldman
Goldman Sachs has reiterated its BUY rating on Life360 (ASX:360) and set a 12-month price target of $10.50. The current price of Life360 is $7.96. Life360 is a global family safety service that aims to keep families, partners, and friends connected and safe. Goldman Sachs believes that Life360 is exposed to a $12 billion global addressable market and has a large opportunity to expand its product suite. The company is currently raising prices for its existing iOS US subscriber base, demonstrating its pricing power with over 50 million global users. Goldman Sachs also notes that Life360’s cost base and customer acquisition economics compare favorably to its US peers. While the company currently spends more on sales and marketing, this is justified by its rapid subscription growth. Goldman Sachs sees scope for significant margin expansion and earnings growth as Life360’s margins increase towards scaled peers. In terms of valuation, Life360’s shares are considered cheap compared to peers when accounting for its robust growth outlook. Goldman Sachs expects the company to demonstrate pricing leverage, improving unit economics, and operating leverage through FY23. With strong fundamentals, a solid balance sheet, and an attractive valuation, Goldman Sachs maintains its BUY rating on Life360.
Author’s Quote
“Webjet and Life360 are both well-positioned to benefit from the rebound in the travel industry. With their strong market positions and growth potential, these companies offer attractive investment opportunities for those looking to capitalize on the recovery.”
Author’s Conclusion
As the travel industry continues to recover, Webjet and Life360 are expected to see significant growth in their respective markets. With their strong business models and favorable market conditions, both companies have the potential to deliver strong returns for investors. It is recommended that investors consider adding Webjet and Life360 to their portfolios to take advantage of the rebound in the travel sector.
George Barham, an accomplished journalist and avid gambling enthusiast, serves as the esteemed Editor-in-Chief at fly-to-australia.com, Australia’s leading source for comprehensive gambling news and insights. With an unwavering passion for both the written word and the ever-evolving world of betting and gaming, George brings a wealth of knowledge and expertise to the helm of our editorial team.
