Citi upgrades Tui to 'neutral' from 'sell'

Citi upgraded Tui to ‘neutral’ (high risk) from ‘sell’ (high risk) as it updated its model to reflect the rights issue, which taken with the lower share price since its last update, drives higher-than-expected dilution.

"With the stock having abruptly de-rated 22% since trading ex-rights we see valuation upside and upgrade," it said.

"Beyond the opportunity embedded in the current valuation, we rate Tui neutral rather than buy in the context of summer '23 booking volumes still -11% versus 2019 at 5 Feb (albeit with today's company statement suggesting some upside to these levels)," Citi said.

The bank is referring to the update Tui put out last Thursday.

"The volatile and uncertain economic outlook combined with the recent share price performance driven by the rights issue dynamics also to some extent highlights the limited institutional investor interest," it said.

Tui shares surged on Thursday after the travel firm said it remained on track for a strong summer. The company said it had seen strong demand across all of its markets this Easter, with the Canary Islands, Turkey, Balearics, mainland Spain and Greece especially popular.