Flight Centre in the departure lounge
Recommendation
- {{x.value}}
{{ twilioFailed ? 'SMS Code Failed to Send…' : 'Enter verification code' }}
{{ completedStep1 ? 'Authentication & Security' : content.trialHeading.replace('{0}', user.FirstName) }}
{{ content.upgradeHeading.replace('{0}', user.FirstName) }}
The email address you entered is registered with InvestSMART
Please login to continue
We have sent you an email with the details of your registration.
Looks you are already a member. Please enter your password to proceed
{{ upgradeCTAText }}
Updating information
Please wait ...
Your membership to InvestSMART Group recently failed to renew.
Please make sure your payment details are up to date to continue your membership.
Having trouble renewing?
Please contact Member Services on support@investsmart.com.au or 1300 880 160
You've recently updated your payment details.
It may take a few minutes to update your subscription details, during this time you will not be able to view locked content.
If you are still having trouble viewing content after 10 minutes, try logging out of your account and logging back in.
Still having trouble viewing content?
Please contact Member Services on support@investsmart.com.au or 1300 880 160
Please click on the ACTIVATE button to activate your Intelligent Investor 15-day free trial
Please click on the ACTIVATE button to finalise your membership
Unsuccessful registration
Registration for this event is available only to Eureka Report members. View our membership page for more information.
Registration for this event is available only to Intelligent Investor members. View our membership page for more information.
- You are already registered for this event.
- This event is already full.
- Please select a quantity for at least one ticket.
- {{ i }}
Forgotten password
Please enter your email address below to request a new password
- Indepth analysis of ASX listed shares
- BUY, Hold and Sell Recommendations
- Ideas Lab
- Special Reports
- Alan Kohler’s Weekend Briefing
- Interviews with CEO’s & top influencers
- Money Cafe and Talking Finance
- Super Advice and Q&A with Ask Alan
Flight Centre's share price has performed much more strongly than we expected following our initial upgrade in Flight Centre's ticket to ride in November 2016. Since then, the stock has risen 106%.
There's no doubt the company is in a bright spot. International airfares remain good value, while recent statistics confirm strength in international departures. These are good times for the business.
But it was only two years ago that gloom prevailed, with Flight Centre reporting six profit downgrades over a short period. How quickly times change.
On a 2018 forecast price-earnings ratio of 24, the stock now looks highly priced. Remember this is a retailer exposed to various risks, cyclical and structural, as well as one-off hits to earnings from epidemics, terrorism, war and the like. While Flight Centre has been an excellent long-term performer, it isn't a stock for the bottom drawer in our opinion.
We'll review the lessons from this recommendation in a forthcoming review, as well as explain more fully why the risks no longer justify holding the stock at the current price. Consistent with our price guide, we're downgrading to SELL.
Note: Some members will have significant capital gains on this stock. Your personal tax planning situation should dictate whether you realise them this financial year, or in the next one from 1 July.
Note: The Intelligent Investor Equity Growth and Equity Income portfolios own shares in Flight Centre. You can find out about investing directly in Intelligent Investor and InvestSMART portfolios by clicking here.
Recommendation
Call 1300 880 160
Start a chat
Schedule a call
