Flight Centre shares climb despite guidance downgrade
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More news: Shares in Flight Centre rose in afternoon trade despite the travel agent downgrading its FY26 profit guidance, following short-term international leisure flight disruptions stemming from the Middle East conflict.
Shares rose 3.4% to $12.2 at 1:52pm AEST.
RBC Capital Markets analyst Wei-Weng Chen maintains an “outperform” rating on the stock with a $15 price target, noting that while the downgrade was larger than expected, it did not come as a complete surprise.
He sees positive catalysts for FY27, including the recently brokered US-Iran peace agreement and the subsequent easing of regional travel restrictions, which will provide a clearer operational runway.
Flight Centre cuts FY26 profit guidance as Middle East conflict weighs on leisure flights
The news: Flight Centre has downgraded its FY26 underlying profit before tax guidance to a range of $275 million to $295 million, down from its previous target of $310 million to $345 million.
The context: The company stated that the revised guidance reflects conflict-driven headwinds, specifically the short-term impact of the Middle East conflict on international leisure travel.
Flight Centre added that while the renewed peace deal delivers a sign of relief and an earnings tailwind, its timing means that it will not translate meaningfully into the company’s fourth-quarter results.
Despite the downgrade, Flight Centre reported that underlying profit for the first nine months of FY26 rose by almost 10%.
The company has also announced an on-market share buy back of up to $200 million, following the successful completion of an earlier program in May.
What they said: “The change in our short-term expectations reflects a temporary, conflict-driven headwind layered over what was shaping as a very solid year,” managing director Graham Turner said.
“It has been driven by an external shock — the Middle East conflict disrupting peak leisure travel- not by a deterioration in our underlying business.”
The sources: ASX, RBC Capital analyst note
