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TUI (XTRA:TUI1) Valuation Check After Strong Full-Year Results, Dividend Declaration and Improving Investor Sentiment

Simply Wall St · 2d ago

TUI (XTRA:TUI1) just wrapped up its fiscal year with higher sales and net income than last year, and paired those results with a fresh annual dividend announcement that underlines management’s confidence.

See our latest analysis for TUI.

The upbeat full year numbers and fresh dividend seem to have lit a fire under sentiment, with a 30 day share price return of 14.61 percent helping push the stock to 8.878 dollars, even though the five year total shareholder return remains negative. This suggests momentum is building but still recovering from a tough stretch.

If TUI’s rebound has you rethinking the travel space, it could be a good moment to expand your watchlist with fast growing stocks with high insider ownership.

With earnings improving, a new dividend on the table, and the share price still trading at a discount to analyst targets, the key question now is whether TUI is a bargain or if markets already expect stronger growth ahead.

Most Popular Narrative: 20% Undervalued

With the narrative fair value sitting at €11.10 against TUI’s last close of €8.88, the storyline leans toward upside driven by improving profitability.

The company's investments in digital platforms, dynamic packaging, and mobile apps (with app sales growing 40%) are increasing the share of direct bookings, reducing distribution costs, and enabling data-driven personalized offers. The rollout of standardized global IT platforms and growing dynamic product content are expected to lift net margins and reduce the cost base in future periods.

Read the complete narrative.

Want to see how modest growth assumptions still back a higher value? The narrative leans heavily on rising margins and a future earnings multiple that undercuts the wider hospitality space. Curious which profit forecasts and discount rate combine to support that stance? Read on to see the full playbook behind this valuation call.

Result: Fair Value of €11.10 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent competition from low cost carriers, along with booking volatility from geopolitical shocks, could easily derail the profitability improvements this narrative leans on.

Find out about the key risks to this TUI narrative.

Build Your Own TUI Narrative

If this view does not quite fit your outlook, or you prefer to dive into the numbers yourself, you can build a complete narrative in just a few minutes, Do it your way.

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding TUI.

Looking for more investment ideas beyond TUI?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.