Flight Centre shares rebound

    Flight Centre shares rebound

    Credit Suisse has upgraded its rating of Flight Centre stock, seeing the shares are rebounding after a 13.5 percent two-day fall.

    Credit Suisse rating went from ‘neutral’ to ‘outperform’ after the share price reaction to Flight Centre’s earnings downgrade when shares were trading 3.9 percent, or $1.23, higher at $33.11 at 1:30pm AEST on Wednesday.

    Credit Suisse cut its price target to $38.61 from $41.44 despite raising its recommendation.

    The Financial Review reported that Credit Suisse analyst Grant Saligari warned clients his bold call was not without its risks given Flight Centre was pursuing an aggressive expansion of non-traditional businesses that likely involved low-margin growth.

    “Flight Centre would benefit from an accelerated restructuring of its traditional shop-based businesses in Australia,” Saligari said.

    Flight Centre recently reported it will miss its full-year profit forecast, despite record revenues, blaming a host of world factors including the Australian federal election and the zika virus.

    Email the Travel Weekly team at traveldesk@travelweekly.com.au

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