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TUI (TUI) shares down 9.34% after £1.3bn Q2 loss
TUI (TUI) shares slumped 5.12% in Thursday’s trading after the travel agency posted a £1.3bn loss for Q2 and said that it could sell off parts of its business to combat the disruption caused by the coronavirus.
TUI logged revenue of just £67.8m for the three-month period ending 30th June 2020, a staggering decline from the £4.2bn reported a year ago.
COVID-19 hit the travel industry particularly hard, and TUI was one of a number of companies forced to cancel holidays during the Europe-wide lockdown.
TUI shares retreated following the news and were valued at 346.71 GBX at just after 4pm BST on the London Stock Exchange on Thursday.
TUI’s share price has now declined 65% since the start of the year.
With its recent struggles, TUI stock would appear to be a tough sell, but could it potentially bounce back during the next 12 months?
TUI did say that summer bookings for 2021 have increased by 145%, and its restructuring plans could put it in a better place.
The Hanover-based company wants to implement a cost-cutting drive that could save hundreds of millions of pounds annually.
TUI also has financial support from the German government, which means that it has a €2.2bn war chest to call on if needed.
The next few months could be very challenging, especially if quarantine requirements in each country continue to change and new lockdowns are put in place.
However, the scale and reach of TUI’s brand should help it to weather the downsides ahead of 2021.
TUI stock is likely to remain lower for a while yet as investors take a step back to see how everything unfolds, but it could be worth buying a few shares with the view to a better long-term future.
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