This report is an updated version of the report published on 21 January 2025 at 1:38 PM AEDT.

Corporate Travel Management Limited (ASX: CTD) 

CTD is an Australia-based firm that offers business travel management services. Its primary activities include coordinating the buying and delivery of travel services for its clients. The company's segments comprise Australia and New Zealand, North America, Asia, and Europe. 

Recommendation Rationale - SELL at AUD 14.62

• Facing Resistance: The stock has crossed its Resistance 1 level. However, its 14-day Relative Strength Index (RSI) is showing a reading of ~71.76, which indicates the stock has entered overbought zone.
• Overvalued Multiples: On a forward 12-month basis – key trading multiples (Price/Earnings, EV/EBITDA, and EV/Sales) are higher than the industry median of the Consumer Cyclicals.
• Europe Revenue Under Pressure: While the company reported higher revenue and EBITDA at group level in FY24, its Europe division earnings were materially below forecast due to one-off projects. As per the company, this is likely to continue in FY25 as well. Meanwhile, CTD's cash and cash equivalents stood at AUD 134.77mn at the end of FY24 vs AUD 150.98 at the end of FY23.
• Cyclical Demand: Corporate travel demand is highly sensitive to global economic conditions. Recessions or slowdowns can lead to reduced corporate travel budgets, impacting CTD's revenue.

CTD Daily Chart

Valuation Methodology: EV/Sales Approach (FY Jun'25E) (Illustrative)

Stock might trade at a slight premium to its peers, considering the revenue and NPAT growth in FY24, expansion in EBITDA margin, and operating margin, etc. For conducting valuation, the following peers have been considered: Web Travel Group Ltd (ASX: WEB), Flight Centre Travel Group Ltd (ASX: FLT), Jumbo Interactive Ltd (ASX: JIN), and others.

Considering that the stock has entered overbought zone, market uncertainties, and risks associated, the share price can witness some correction at the current levels before moving higher. Hence, a ‘Sell’ recommendation is given on the stock at the current market price of AUD 14.620, as of 21 January 2025 at 1:02 PM, AEDT.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical issues prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 21 January 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Dividend Yield may vary as per the stock price movement.

Note 5: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.