TUI's shares may surge by 80% in the near future.
Travel conglomerate TUI has managed to substantially reduce its debt following the coronavirus pandemic and has returned to pre-pandemic financial levels. The company's share price currently presents a potential entry opportunity, according to analysts, with gains of up to 80% possible.
Germany's reputation as a travel powerhouse remains intact, with a recent tourism analysis by the Foundation for Future Studies revealing that 63% of respondents have booked a five-day trip for 2024, the highest number in almost two decades.
TUI's latest quarterly figures mirrored this optimistic outlook. The travel provider reported a 13% year-on-year increase in revenue to €4.9 billion, and earnings before interest and taxes (EBIT) jumped from €6 million to €51 million. TUI CEO Sebastian Ebel projects a revenue increase of 5-10% for the full fiscal year (ending October) and an adjusted EBIT increase of 7-10%.
While the stock market initially failed to acknowledge this positive development, the share price plummeted by around 10% following the release of the figures, apparently due to analysts' disappointed expectations. Barclays expert Chandni Hirani commended TUI's ability to maintain higher average prices post-pandemic and during inflation, but she and other analysts were disappointed by the "weak development" in the areas of "markets" and "airline".
In the "markets" sector, TUI deals with travel organizers. Bookings have not entirely collapsed, but there is a strengthening trend towards fewer long-term advance bookings, which has raised concerns among analysts. In the "airline" sector, various European airlines serving more than 160 destinations worldwide with over 120 jets predominantly for holiday destinations are grouped. More than half of the tourist flights belong to the TUI subsidiary in the UK, which is still grappling with the consequences of Brexit and increased travel costs for island residents.
However, the "holiday experiences" sector performed exceptionally well, encompassing hotels & resorts, cruises, and TUI Musement (tours & activities). TUI achieved an EBIT of €150 million from October to December in the hotels & resorts sector (up from €90.7 million the previous year). Cruises also saw a 40% increase in EBIT, reaching €48.2 million. Analysts suggest using the current price dip as an entry opportunity, as a price target of €12 offers a potential gain of almost 80%.
It should be noted that TUI AG's share price has fluctuated recently, with a recent dip on May 23, 2025. The current consensus among analysts is to hold or accumulate TUI AG shares, citing some weaknesses in the technical picture following a downgraded analysis from a previous "buy" recommendation. However, the company's strong business performance and diversified model suggest stability and potential for future growth.
TUI reported a 1.5% increase in group revenue for the second quarter of 2025, reaching €3.71 billion, indicating a robust performance despite economic challenges. The company's focus on integrated and diversified activities, including hotels, cruises, and tour operations, is expected to drive future success.
In conclusion, while TUI AG's stock has experienced recent price dips, its strong business performance and diversified model suggest it could be a stable investment opportunity. However, analysts advise holding or accumulating rather than buying, awaiting further developments. The potential for significant price gains like an 80% increase is not guaranteed but is possible given the company's projected growth.
- TUI's focus on integrated and diversified activities, such as hotels, cruises, and tour operations, reflects a strategic move towards maintaining financial stability and driving growth, especially in the finance and business sectors.
- The 'holiday experiences' sector, comprising hotels & resorts, cruises, and TUI Musement (tours & activities), has been a major contributor to TUI's successful financial performance, suggesting a positive impact on lifestyle and consumer spending.
- Investment analysts suggest using the current price dip as an entry opportunity for TUI AG shares, particularly due to the strong business performance and potential for growth in areas like travel and tourism, where higher earnings before interest and taxes (EBIT) and revenue increases have been reported.
