Australian earnings preview – Webjet

Australia

Full Year:

Webjet Ltd (WEB) is an online travel agency operating in Australia and New Zealand, with customers across global consumer and wholesale markets. It supplies lodging to the travel industry through its WebBeds division. It reports its full-year numbers on the 20th of August.

The travel industry has been decimated by the impact of the COVID-19 pandemic as borders slammed shut globally and domestically and travellers cancelled or postponed trips.

Webjet raised over $360 million in equity in April to cover operating costs and capital spending until the end of 2020, made more than 440 roles redundant, deferred its interim dividend payment and reduced executive pay. Webjet has raised an additional $160 million in recent months to boost liquidity and fund potential takeover deals in the pandemic-ravaged travel industry.

After a strong first half of the year, it’s been a very different story in the second half for Webjet.

Consensus estimate earnings is around $55m FY20, implying a loss of $31 million during the second half of the year.

Technically, the decline from the year to date $14.63 high to the April $2.25 low is impulsive and the price action since then appears corrective. On the downside, support near $2.50 was recently tested and held, perhaps by buyers expecting a vaccine-induced recovery. Whether this turns out to be a smart move, time will tell.

On the topside, short term resistance is viewed $3.70 region coming from the gap lower on March the 18th  before medium term resistance near the $4.92 high of June.

Australian earnings preview – Webjet

Source Tradingview. The figures stated areas of the 14th of August 2020. Past performance is not a reliable indicator of future performance.  This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation

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