Ord Minnett has downgraded travel retailer Flight Centre after the company flagged difficulties in achieving its full year profit guidance due to the coronavirus outbreak last Friday. It’s slapped the company with a hold rating and a price target of $41.38. Prior to the announcement, Ords had FLT as a buy with a price target of $46.09. Shares are currently down 3.1 per cent to $38.52.
Given risks posed by the coronavirus, Ords has also lowered its price targets on other travel and tourism-linked firms listed on the ASX, including Corporate Travel, Experience Co, Event Hospitality and Entertainment and Hello World Travel.
Notably, Ords still retains buy ratings on all the companies listed above with price targets higher than their current trading level.
“The market has taken a ‘sell first and ask questions later’ approach to the travel and tourism segment given the potential earnings risk posed by the current bushfires and the Coronavirus issues,” Ords told clients.
“We understand this reaction but note history suggests that the Coronavirus issue will be resolved and that normal operating conditions return within a relatively short timeframe.”
Online travel retailer WEB is also deemed a buy with the broker maintaining a hefty price target premium on the stock of $40 per share.