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Hi all,
My thoughts based on research so far.
I hope the analysis below helps anyone who is invested in TUI and those considering an interest.
Some of the headwinds:
1. Debt after rights is still too high at approx. £2.2bn
2. Interest payments were about 4.7 times higher than 2019 about £70m vs £400m. Post rights issue these payments are expected to reduce by about £80m to approx. £320m which is significantly eating into net earnings per share.
3. Due to the high debt you cannot rule out another rights issue to bring down the debt and interest payments resulting in further dilution.
4. You also cannot rule out a further rights issue to support future growth. Replacing or refurbishing a cruise ship fleet and airplanes is not cheap. And I don't believe future net earnings will be enough to lower the debt and support growth.
5. The cost of sustainable travel is underestimated or not even factored albeit its further in the future.
6. Current margins are at risk due to the uncertainty of customer booking behaviour leading to reductions in last-minute bookings margins to fill seats.
7. Customers facing major financial pressures (keep a roof over their heads or go on holiday this year)
8. Any strike action impacting operations

Considering some of the headwinds how much would you pay/risk investing in TUI.

I have complied some analysis below that may assist, again you need to check to ensure the numbers I have used are in line with your research.

If we assume that TUI will make £178m (€202m) net earnings in 2024 that’s from a -£207m (-€235m) 2022, net loss so a gain of £385 (€437m) from 2022 base. I have also added additional net earnings above this level to see what the corresponding share price would be valued at various P/E ratio's.
Assuming 507m registered shares after rights issue.

Share Price at various P/E ratio and 2024 net earnings

Net Earnings (P/E 9) (P/E 10) (P/E 11) (P/E 12)
£178m £3.16 £3.51 £3.86 £4.21
£195m £3.47 £3.85 £4.24 £4.62
£213m £3.78 £4.20 £4.62 £5.04
£231m £4.09 £4.55 £5.00 £5.46
£248m £4.41 £4.89 £5.38 £5.87
£266m £4.72 £5.24 £5.77 £6.29
£283m £5.03 £5.59 £6.15 £6.71
£301m £5.34 £5.94 £6.53 £7.12

Ideally, I would like to pay for TUI shares between a P/E of 9 or 10 considering the risk of further dilution, headwinds and fundamentals. That would make my entry point at £178m net earnings of £3.16 or £3.51 a share.
Even if TUI does better than £178m and assume net earnings of £231m in 2024 that would mean a net gain from 2022 base of £466m and a share price of £4.09 P/E 9 and £4.55 P/E 10
It also equates to net earnings of £178m and a P/E ratio of 12 and a corresponding share price of £4.21
I may take a risk & buy at a price around £4.09 to £4.55 and be prepared to risk a further 15% drop from these levels.

Good luck and do your own research befor

I think the answer to my question could be below, not sure so please correct if need be.

1. Registered Shares after rights issue = 507 mil
2. Projected net earnings 2023: £147mil (€167mil) & 2024: £179mil (€203mil)
3. Projected net earnings per share 2023: 29p & 2024: 35.3p
4. Current Share Price @ £5.40
5. P/E Ratio 2023: 18.6
6. PE/Ratio 2024: 15.3

In my opinion all the rights issues to date have been to reduce debt because of the pandemic and not for growth so that's just money down the drain for all those who participated in the rights which massively diluted their holdings.

Now that the debt is lower, thanks to the unfortunate donation of all who participated in the rights issues, which I do understand the horrible losses you have endured.

There may be an investment case for TUI even though the debt is still high but at what entry point and that depends on what P/E ratio you are prepared to pay for based on information available for 2023 and 2024?

The question is what P/E ratio is fair considering the headwinds, 1. Still high debt. 2. Interest rates significantly higher than pre pandemic levels, cost of debt higher. 3. Cost of living pressures and the choices people have to make regarding expenditure. Potentially, further interest rate rise to come.

If these assumptions are correct TUI shares are not cheap?

So further downside to come in my opinion, would appreciate your thoughts on what you think the shares are worth based on fundamentals going forward.

Thanks

Please can someone help with my questions below.

Hi all

Please can you help me with the following so to work out if the current TUI shares are at a discounted, fair or overvalued projected P/E ratio. (So to take out any individual personal views about the shares and base it on fundamentals)

1. What will be the total amount if shares in issue after this rights issue?

2. What are the projected net earnings for 2023 & 2024

3. What is the projected P/E Ratio 2023 & 2024

Thank you.

Hi all

Please can you help me with the following so to work out if the current TUI shares are at a discounted, fair or overvalued projected P/E ratio. (So to take out any individual personal views about the shares and base it on fundamentals)

1. What will be the total amount if shares in issue after this rights issue?

2. What are the projected net earnings for 2023 & 2024

3. What is the projected P/E Ratio 2023 & 2024

Thank you.

Hi all

I am considering investing in TUI.

I came across the article below stating the share dilution and a P/E ratio of 16 for TUI shares at a price I am assuming at approximately £6.20.

I need your help as I do not know how to calculate myself.

What would be the price of the shares be if I thought investing in TUI with a P/E ratio of say 10 as a fair value considering the current headwinds?

Thanks

https://www.fool.co.uk/2023/04/11/is-it-finally-time-to-add-tui-shares-to-my-watchlist/

Hi all just wanted to know if it is still possible to buy RR shares and be eligible to participate in the rights issue?
If yes what would be the last date I could buy the shares and be entitled to the rights issue.
Thanks all