TUI Travel Share Discussion Threads

[miata] 22/11/2013 10:46

Mike van Dulken, Head of Research at Accendo Markets.

"While Fredriksen still sees a merger of the two as an option (a long-running, fruitless, but share price moving saga), the TT shares have gapped down like they did on Jan 23 when TUI AG said it would not make an offer to buy out the subsidiary (not beneficial to shareholders at current exchange ratio).

"With Fredriksen gaining more influence in the parent, is this another effort to talk down TT shares to a better exchange ratio for a nil-premium all-share merger? The subsidiary was +37% YTD before today's news, now down to +30% compared to the parent's +36%? Prepare for a continually rocky transfer to the final destination."

Cazenove

We would see any resulting dip in the TUI Travel share price as a buying opportunity. On the other hand and contrary to Mr. Fredriksen, we believe that "TUI Travel to TUI AG" is an expensive switch here, and that forfeiting the TT/ dividend is not fully compensated by the SOP upside in TUI1.

TUI Travel (OW, PT 410p) in our view will increasingly appear as the Holiday blue chip and yields a secure 3.7% yield. Today we published a separate report on Thomas Cook Group which we believe offers favourable read-across for TT/. While we see a risk of margin dilution in the accelerated online growth targeted by both players, TUI Travel in our view benefits from higher selling prices and higher attractiveness in the affiliate channel, which we see as critical to cushioning potential online marketing investments (key charts reproduced overleaf). We also note that TUI Travel should receive disposal proceeds of €38m from the sale of its stake in NATS in Q114e, which will cover 26% of our projected 2014e dividend outflow. Although management has no history of special dividends and has voiced opposition to buybacks, we believe that this brings strong support to the stock's industry-leading dividend yield of 3.7% (4.0% at the placing price of 366p).

TUI AG (N, PT €11) has significant SOP upside potential, but we do not expect signs of cash generation before H214. We mark to market our TUI AG SOP and move our Nov-14 Price Target to €11 (was €10 to Sept-14). TUI AG is trading at a 33% discount to its SOP value. New CEO Friedrich Joussen, in our view, has the right strategy to precipitate a narrowing of this discount over time. While we recognize that Mr. Fredriksen might have another shot at securing a board seat at TUI AG as early as the next AGM in February 2014 and shaking up governance, we believe that the bulk of the fundamental changes initiated by Mr Joussen will take at least until H214e to materialize, starting with dividend upstreaming from the unlisted assets. Only then do we believe that TUI AG shareholders could reconsider a merger with TUI Travel. By 2015e, TUI AG could also be in a position to resume dividend payments, but on no more than a c. 2.2% yield on the current share price.

[boonboon] 22/11/2013 08:44

how big was the stake as there hasn't been an RNS?

[liam1om] 22/11/2013 08:38

Guessing its something to do with Fredriksen selling his stake for 366.

[nicebut] 22/11/2013 08:37

Courtesy of angel shares on the TCG thread.

[herewegouk] 22/11/2013 08:32

I wasn't a holder by the way but I am since 10 minutes ago, if they drop much beyond where they are now I'm out.

[herewegouk] 22/11/2013 08:30

From what I can see, this morning market makers are happier to take these from you than sell them to you. They want them for some reason. I would suspect a quick turn around from this opening low later on. I could be completely wrong off course.

[boonboon] 22/11/2013 08:23

why the drop?

[bbfifi] 21/11/2013 17:16

If you expect to have perfect children you will be constantly disappointed and your children constantly frustrated. If you realize that your children are perfectly themselves in every moment, you and your children will be at peace..

[miata] 19/11/2013 09:11

TUI Travel edged up through 388p on news it has agreed to sell the majority of its interests in The Airline Group, a shareholder in UK Air Traffic controller NATS Holdings, for cash of about £38m. It placed an order for two additional Boeing 787-8 Dreamliner aircraft for delivery in 2016, bringing its total order to 15.

[rathlindri] 08/11/2013 21:20

Just keeps going in the right direction, final results 10th December, optimistic of a positive report.

[rathlindri] 25/10/2013 16:28

Showing a clean pair of heels to Thomas Cook at the minute....back to 400p soon perhaps?

[rathlindri] 03/10/2013 19:20

Going well here over the past week

[birdsedgeuk] 27/9/2013 07:26

Im in.Tipped off by traderdiarycouk tweet.Profit growth looks good.In at 365 yesterday

[wynmck] 26/9/2013 13:12

Thanks Miata.
Numis upgrade to Add today.Tgt £4.
Shore retains Buy.
IC Online comment:
Tui Travel is confident of achieving underlying profit growth of 11% in the year to end September after strong performance in the UK and Nordic regions.
The winter programme is already 31% sold.
We keep our Buy recommendation.

[miata] 26/9/2013 12:43

Barclays

Pre-close stronger than expected; on track to deliver on 5-year growth roadmap.
Tui Travel has delivered a solid pre-close trading statement and the company is set to report at least 11% constant currency EBIT growth in FY 13. We have increased our FY13 estimates by 1% to reflect this (EBIT of £577m vs. Bloomberg consensus of £559m). This growth is ahead of Tui's 5-year target of delivering between 7-10% underlying growth p/a and should be taken well by the market. Winter 2013/14 bookings have been impacted by the recent turmoil in Egypt. Ex-Egypt, average selling prices across all key markets are up YoY for winter 2013/14 and there is no change to guidance. We leave our FY 14 and FY 15 estimates unchanged.

We reiterate our Overweight recommendation. Our 420p PT offers 18% upside.

[bbfifi] 19/9/2013 21:28

Happiness is a butterfly, which when pursued, is always just beyond your grasp, but which, if you will sit down quietly, may alight upon you...

[miata] 12/9/2013 08:07

12 Sep 2013 TUI Travel PLC TT. JP Morgan Cazenove Overweight 363.20 355.40 410.00 410.00 Upgrades

[rathlindri] 02/9/2013 10:33

Bouncing back strongly here today

[hyden] 16/8/2013 09:10

Thanks, Miata. Useful info.

[miata] 16/8/2013 09:06

Jefferies said Tui Travel and Thomas Cook look to have 2013 "in the bag", with strong recent trading updates from both. Things look good for next year too, with the travel sector "in a better state than for some years".

What will differentiate the two firms now are self-help opportunities, says the broker, with Thomas Cook ripe for further development. Jefferies raised its target price for both travel agents, while JPMorgan upped its target for Tui.

[hyden] 07/8/2013 22:41

I agree and I suspect winsome is being very optomistic with his price target. Maybe he will buy back in a lot higher, or not at all? All in my humble opinion of course, and DYOR.

[rathlindri] 07/8/2013 16:17

What's not to like about today's report?? Beats me...

[miata] 07/8/2013 14:03

Good results, I think Investec and Numis had unrealistic expectations in the current economic (and political eg Egypt) climate.


TUI Travel (TT.L), the world's largest tour operator, expects to grow profits by at least 10 percent this financial year, boosted by the popularity of fixed-price holidays among budget conscious Europeans.

The company, which owns the Thomson and First Choice brands, said on Wednesday 2013 summer booking volumes in Britain were up 4 percent, with average selling prices 7 percent higher.

The company also said it had also made an encouraging start to the 2013/14 winter season, with 21 percent of its winter programme already sold.