Goldman Sachs has reinstated coverage on Webjet Limited (WEB: AU) (OTC: WEBJF), a digital travel business, with a Buy rating and a price target of AUD8.20.
The investment firm's decision follows the recent demerger of Webjet's Online Travel Agency (OTA) and GoSee businesses. Goldman Sachs' analysis emphasizes the potential of Webjet's B2B segment, WebBeds, to drive the company’s growth.
The firm’s 12-month price target suggests a total shareholder return (TSR) of approximately 19%. Analysts at Goldman Sachs project that Webjet’s B2B business, WebBeds, will experience a Total Transaction Value (TTV) compound annual growth rate (CAGR) of around 15% from AUD5 billion in the fiscal year 2025 to AUD10 billion by the fiscal year 2030.
The growth is expected to be driven by an increased sales mix from the rapidly expanding Asia-Pacific and U.S. markets, which are forecasted to constitute about 59% of sales by the fiscal year 2027.
Despite anticipating some moderation in revenue margin to approximately 7.2%, Goldman Sachs predicts that Webjet will maintain a robust EBITDA (earnings before interest, taxes, depreciation, and amortization) to revenue margin of around 50%.
Webjet's strategic emphasis on the B2B sector through its WebBeds business is aimed at capitalizing on global growth opportunities. This focus aligns with the company's efforts to leverage its presence in the higher-growth regions of the Asia-Pacific and the United States.
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