CTD has already corrected 34% since the height of the “reopening trades” optimism back in late April and unfortunately we believe there’s probably still further to go as a 3rd Covid wave washes across Australia. We believe the stock is still priced for life after Covid albeit with less enthusiasm than 3-months ago hence if we see cases continue to spiral leading to another increase in working from home (WFH) and the subsequent lack of travel these forecast improved earnings look destined to be pushed back in time, weighing on the stock over the short-term in the process.
- We are a fan of CTD as a business but feel the sentiment towards the Covid-influenced travel stocks is likely to see its shares make fresh 2022 lows.
MM will consider CTD around the $16 area
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