TUI Group Share Price Forecast August 2021 – Time to Buy TUI?

Shares of German cruise operator TUI Group (LSE: TUI) have been trading at £329.00. The shares are up by 20.26% since the beginning of 2021. The company has recently posted improved results which cover the April-June quarter(Q3).

TUI Group – Technical Analysis

According to TUI Group’s financial statement, the company’s market cap is currently at £3.655 billion with total assets worth £12.63 billion. Revenue for 2020 was at £6.98 billion with a profit margin of -39.63%, compared to £16.73 billion in 2019.

TUI Group’s moving averages such as Exponential Moving Average (100)(366.5), Simple Moving Average (100)(385.5), Exponential Moving Average (200)(355.8) and Simple Moving Average (200)(354.2) are pointing towards selling. Oscillators such as Stochastic RSI Fast (3, 3, 14, 14)(55.1),  Williams Percent Range (14)(−71.4), Bull Bear Power(5.8) and Ultimate Oscillator (7, 14, 28)(49.0) are pointing towards a neutral action.

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Recent Developments

TUI grabbed a lot of media attention for announcing total flexibility for workers. This rule required TUI’s workers to attend office once a month. The move was touted as one of many by companies that have adapted to the fundamental shift in working practices as a result of the pandemic. The Group also sold off its minority stake in a portfolio of hotels worth €670 million to the Riu family. The 49% minority shareholding equates to the ownership of 21 properties.

As mentioned before, TUI Group provided results for the April to June quarter. It’s worth noting that there were far more travel restrictions during this quarter last year, while rapid vaccinations have changed that situation this year. It reported a loss of €940 million which is a significant reduction from Q3 last year. Revenues are up by almost 805%. The company expects to reach 60% of its summer 2019 volumes as it reported 4.2 million summer bookings. This is a 1.5 million increase from the last update. The TUI share price is still around half its initial 2020 levels and increased by a mere 1% following the update. While it’s not a significant increase, it is an indication that investors are reacting positively to the update. The shares are also up by 65% from a year ago, which is an indication that it is well on its way to recovery.

Should You Buy TUI Shares?

For investors looking to buy shares in a company involved in travel and tourism, they need to look at the current pandemic condition and vaccination rates. For example, more than 75% of adults in the UK have had full vaccination. But there has been a 6% increase in COVID positive patients in the last week. If these figures get worse, it will hamper the slow recovery of the global travel and tourism sector and TUI shares as well.

Also, there is no way to predict what the post-summer travel demand will turn out to be as the virus could get stronger during the winter months. The general health of the UK economy should be considered as well. It grew by 4.8% in the April-June quarter which is below Bank of England’s expectations of 5%. Consumers may not go for discretionary purchases like cruises if the economic recovery does not turn out to be as strong as expected over time. This is one of the main factors that could hold TUI’s share price back. However, the prospects for these shares are better than at the same time last year. Although a little risky, investors can pick up TUI shares at the moment.

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