Here is 25th May CTD summary Apologies for formatting, I think...

Here is 25th May CTD summary

Apologies for formatting, I think Adobe wants me to spend more hard earned.

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	Column 1
0	Corporate Travel Management
1	Not immune but still growing strongly
2	A number of data points recently have suggested that corporate travel demand is slowing given the Australia Federal Election and geopolitical uncertainty. Given the global uncertainty, we think it is appropriate to move our forecasts in line with CTD’s FY19 guidance. We therefore make minor downgrades to our forecasts. Despite this, we still believe that CTD can report solid earnings growth due to new client wins, the benefits of its tech hubs and optimising Lotus Travel. We maintain an Add rating with a new price target of A$27.50.
3	Data points suggest corporate travel demand has slowed Post reviewing a number of travel and airline trading updates which were softer than expected, it is clear that travel demand is slowing driven by uncertainty and lower business confidence levels. Corporate travel demand has a strong correlation to GDP growth which has slowed. In Australia, the Federal Election uncertainty and softer economy has seen travel demand slow in recent months. In April, the NAB Monthly Business Survey said that business conditions, confidence and forward orders were all below average. Virgin Australia recently said that the Australian corporate sector has been affected by the timing of Easter and has been slow to recover due to the impact of the Election. Qantas said that it was seeing softness in parts of the domestic corporate travel market for May and June. It also noted that growth is slowing in the small business market. It hopes to have a better sense of how temporary this is after the Election which it said always has a dampening impact on travel demand. How quickly corporate travel demand recovers post the Election will be key. The delay in a Brexit outcome has also affected travel demand in the UK, while the prolonged Trade War between the US and China is affecting both of these countries. We revise our forecasts to be in line with guidance In terms of what CTD can control, it is doing a good job – record new client wins (market share gains), development and deployment of leading technology, attracting new sales staff and successfully integrating acquisitions. FY19 EBITDA guidance of A$150m +19.6% was recently reiterated and we think this can be achieved. However, the impact from the Australian Election, Brexit delays and ongoing US/China Trade Wars suggests the upgrade we were previously hoping for is now unlikely to eventuate, with clients reducing activity and therefore offsetting the group's currency gains from a lower AUD. We have revised our FY19 EBITDA forecast by 2.3% to be in line with guidance. Importantly, we believe that CTD is on track to deliver 100% cashflow conversion. In FY20- 21, CTD is targeting 15% pa organic EBITDA growth with any M&A activity posing further upside. We have also moved our forecasts to be in line with this guidance. This has seen our FY20 forecast fall by 3.1% while our FY21 forecast is largely unchanged. Our forecasts in these two years are underpinned by 20% growth from both the US and Asian businesses (new client wins, its tech hubs and optimising Lotus Travel). Investment view – Add rating and A$27.50 price target While we have made modest revisions to our forecasts, we still believe that CTD has a long dated growth profile. The global corporate travel market opportunity is large and there is considerable market share CTD can win over coming years to drive strong organic earnings growth. We maintain an Add rating and note that the company is trading at a material discount to its five-year average forward PE. Due to forecast changes and applying multiples in line with other high quality growth companies, our blended valuation has fallen to A$27.50 (was A$31.65).