Flight Centre getting cheaper

Flight Centre's stock has fallen almost a third since it topped $55 in March and now sits close to our $40 Buy price. While the company is expecting to grow profits nicely in the year ahead, growth expectations are falling as the Aussie dollar falls, making overseas holidays less affordable. Investors are also factoring in a slowing economy as commodity prices fall due to slowing growth in China, and the completion of massive projects like the LNG developments that employ thousands of people until they turn on the ignition. None of these trends are good news for Flight Centre, but...

Flight Centre's stock has fallen almost a third since it topped $55 in March and now sits close to our $40 Buy price. While the company is expecting to grow profits nicely in the year ahead, growth expectations are falling as the Aussie dollar falls, making overseas holidays less affordable. Investors are also factoring in a slowing economy as commodity prices fall due to slowing growth in China, and the completion of massive projects like the LNG developments that employ thousands of people until they turn on the ignition. None of these trends are good news for Flight Centre, but the company has shown it can adapt and we expect it to have a long and healthy future.

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