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TUI AG (DE:TUI1)
XETRA:TUI1
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TUI AG
(XETRA:TUI1)
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Rating:61Neutral
Price Target:
€9.00
▲(11.39% Upside)
Action:ReiteratedDate:02/18/26
The score is driven primarily by improving profitability and solid cash generation but constrained by a still debt-heavy balance sheet. Valuation is a clear positive with a low P/E and dividend yield. The latest earnings call supports the outlook via reconfirmed guidance and better net debt/cash flow, while technical signals remain weak with price below key short-term moving averages and a negative MACD.
Positive Factors
Diversified, vertically integrated business model
TUI's revenues come from package holidays, owned and managed hotels, airlines and cruises plus digital sales and partnerships. This multi-stream, vertically integrated model spreads demand risk, enables cross-selling and direct distribution, supporting durable revenue resilience.
Improved profitability and consistent cash generation
The company moved from loss-making to sustained positive operating profit and cash flow versus 2021–22. Consistent OCF/FCF supports ongoing operations, funds investments and gradual deleveraging, increasing resilience through tourism cycles and enabling reinvestment in growth initiatives.
Cruise and owned-hotel operational strength
Cruises showing scaled capacity growth, high occupancy and pricing power improves margin sustainability. Simultaneous expansion of owned hotels and river cruises increases control over unit economics, enhances vertical integration and supports durable margin and cash generation improvements.
Negative Factors
High leverage and debt-heavy capital structure
A debt-to-equity ratio around 2.5x keeps TUI's balance sheet constrained, limiting strategic flexibility. Elevated leverage raises vulnerability to demand downturns or rising rates, increases refinancing needs and reduces headroom for opportunistic investments or rapid deleveraging.
Volatile free cash flow with limited debt coverage
While FCF has been positive across recent years, recent TTM and 2025 FCF growth were negative and volatile. This inconsistency restricts the pace of debt paydown, limits capacity for capex or dividends in weaker periods and raises long-term funding uncertainty.
Balance-sheet timing and fleet delivery pressures
Planned aircraft deliveries will be capitalized, increasing liabilities and reducing near-term net-debt progress. This structural timing effect heightens refinancing and liquidity risk, and could amplify leverage if travel demand softens or financing costs rise during the delivery period.
TUI AG (TUI1) vs. iShares MSCI Germany ETF (EWG)
Market Cap
€4.10B
Dividend YieldN/A
Average Volume (3M)2.37M
Price to Earnings (P/E)6.0
Beta (1Y)1.31
Revenue Growth4.37%
EPS Growth25.42%
CountryDE
Employees53,959
SectorConsumer Cyclical
Sector Strength84
IndustryTravel Services
Share Statistics
EPS (TTM)-0.09
Shares Outstanding507,431,030
10 Day Avg. Volume2,217,561
30 Day Avg. Volume2,371,859
Financial Highlights & Ratios
PEG Ratio0.25
Price to Book (P/B)2.23
Price to Sales (P/S)0.16
P/FCF Ratio3.97
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
€10.63Price Target Upside31.56% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
EPS Forecast (FY)1.41
Revenue Forecast (FY)€24.66B
TUI AG Business Overview & Revenue Model
Company DescriptionTUI AG, together with its subsidiaries, provides tourism services worldwide. It operates hotels and resorts under the Robinson, Riu, TUI Blue, Blue Diamond, TUI Suneo, and TUI Magic Life brands. The company is also involved in the tour operation and airlines businesses. In addition, it operates cruise liners. The company operates a fleet of 1,600 travel agencies and online portals; 5 airlines with approximately 150 aircraft; and 15 cruise liners, as well as approximately 400 hotels. The company was formerly known as Preussag AG and changed its name to TUI AG in June 2002. TUI AG is headquartered in Hanover, Germany.
How the Company Makes MoneyTUI AG generates revenue through multiple streams primarily centered around its travel and tourism services. The company's core revenue sources include package holiday sales, which combine flights, accommodations, and other services, and direct sales from its airline operations. Additionally, TUI earns revenue from its hotel and resort businesses, which include both owned and managed properties. The cruise segment is another significant contributor, with TUI operating several cruise lines that offer vacation packages at sea. The company also benefits from ancillary services such as travel insurance, excursions, and car rentals. Strategic partnerships with airlines, local service providers, and technology platforms enhance TUI's offerings and operational efficiency, further bolstering its revenue potential.
TUI AG Earnings Call Summary
Earnings Call Date:Feb 10, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:May 20, 2026
Earnings Call Sentiment Positive
The call emphasized a strong operational start to FY2026 with a record underlying Q1 EBIT (EUR 77m), improved net debt (EUR 0.5bn), positive cash flow, resumed dividend policy and reconfirmed guidance (EBIT +7%–10%, revenue +2%–4%). Key growth vectors include cruise capacity, Holiday Experiences (owned hotels and river cruises), the app/AI conversion uplift and Musement wholesale partnerships. Management also highlighted structural balance sheet improvements (lease restructuring, ship ownership) and ongoing transformation of Markets + Airlines toward dynamic packaging. Offsetting these positives are notable one‑offs from the Jamaica hurricane (c. EUR 21m combined impact across hotels and flights), regional demand variability (Turkiye, some long‑haul markets), the transitional effects of reducing third‑party risk capacity, and near‑term headwinds from planned aircraft deliveries that will affect net debt dynamics. Overall, the positive operational and financial momentum, plus reaffirmed guidance, outweigh the identified one‑off and transitional challenges.Q1-2026 Updates
Positive Updates
Underlying EBIT Record and YoY Improvement
Underlying EBIT of EUR 77 million in Q1 — the highest underlying EBIT the company has reported for a Q1 — representing an increase of EUR 26 million year‑on‑year versus the prior year.
Reconfirmed Full‑Year EBIT and Revenue Guidance
Management reconfirmed full‑year guidance: underlying EBIT growth of 7%–10% and revenue growth guidance of 2%–4% (constant currency commentary supports reiteration).
Net Debt and Cash Flow Progress
Net debt improved by EUR 0.5 billion year‑on‑year (EUR 0.2 billion FX impact; underlying improvement EUR 0.3 billion). Cash flow improved by approximately EUR 50 million in Q1, driven by structural savings, lower interest and reduced lease/asset financing repayments.
Interest and Profitability Improvements
Interest expense improved by around EUR 10 million (structural improvement via lease portfolio restructuring and asset ownership changes). Q1 was the first underlying result positive pre‑minorities in a winter quarter and basic loss per share halved year‑on‑year for the quarter.
Cruise Segment Strength
Cruise delivered a strong performance: capacity up c.16%, occupancy up c.3% (approaching full capacity), stable daily rates, and continued pricing power (Marella winter rate increases ~5%). Management highlighted strong demand and substantial operational improvements in TUI Cruises and Marella.
Holiday Experiences and Hotels Momentum (Excluding One‑offs)
Holiday Experiences improved by EUR 18 million despite hotel one‑offs and hurricane impact. Excluding Jamaica/one‑offs management noted winter occupancy +1% and average daily rate up ~5%, indicating underlying recovery in owned hotel assets.
Commercial & Distribution Progress — App and Partnerships
Investments in the global app and AI features have driven significant conversion uplifts; the app is the most efficient booking channel. Musement added a major wholesale partner (Jet2) — joining Booking.com, easyJet and lastminute.com — demonstrating traction in third‑party distribution. Musement expected to deliver mid‑single‑digit growth.
Operational & Balance Sheet Actions Completed
Completed strategic moves: took final Marella ship into ownership, early repayment of convertible 2028, lease portfolio restructuring, and payments/repayment actions that improved financial profile and enabled return to dividend policy (proposal to pay 10%–20% of underlying EPS).
Growth in Owned Holiday Assets and River Cruise Expansion
Opened 5 hotels in Africa and 1 in Vietnam; launched a second Nile river ship and now operate six river vessels — expanding Holiday Experiences footprint and strengthening vertically integrated model.
Sustainability Recognition
Achieved an A rating from CDP, reinforcing sustainability credentials which management cited as commercially relevant and core to strategy.
Negative Updates
Jamaica (Melissa Hurricane) One‑Off Impacts
Severe one‑off disruption from Hurricane Melissa in Jamaica: forced closure of Riu and Royalton hotels and significant flight cancellations. Management quantified the Jamaica hit at roughly EUR 15 million to Hotels & Resorts and EUR 6 million impact to Market & Airlines in the quarter, reducing reported results.
Summer / Booking Momentum and Near‑Term Demand Variability
Management reported summer bookings tracking down c.2% in parts of the Q&A and said summer is slightly below last year (though they remain confident to reach FY guidance). They also flagged late booking behavior (families buying later), ongoing retail footfall recovery in Germany after heavy snowfall, and regional variability in demand.
Regional Weakness — Turkiye and Some Long‑Haul Markets
Turkiye facing weakness due to high inflation and currency dynamics (impacting family demand). Long‑haul demand (e.g., some North America exposure and parts of Asia) remains weaker and is less relevant for TUI’s core profitability but affects revenue mix.
Transition Risks from Reducing Third‑Party Risk Capacity
Management is deliberately reducing third‑party allotments/guarantees and shifting toward dynamic packaging (management suggested dynamic share could move toward ~20%). This shift can suppress near‑term booked risk capacity and introduces execution risk during transformation even if it protects margins over time.
Balance Sheet Timing Effects from Aircraft Deliveries
Up to ~15 aircraft deliveries expected this year; these deliveries will move directly onto the balance sheet and will reduce the pace of net‑debt improvement seen in Q1 (management cautioned the net‑debt gains will not repeat at the same pace).
Early‑Stage Monetization for New Channels
New distribution channels (LMMs, AI/chat integrations including ChatGPT) are live but currently generate low booking volumes — primarily information traffic so far — so revenue contribution is early and modest.
Company Guidance
TUI reconfirmed its FY26 targets, reiterating revenue/sales growth of 2–4% and underlying EBIT growth of 7–10% (absolute underlying EBIT guidance EUR 325–350m); the board pointed to a strong Q1 as the basis for this—underlying Q1 EBIT was EUR 77m (highest Q1 ever, +EUR 26m YoY), constant‑currency sales +1%—and highlighted a EUR 0.5bn YoY net debt improvement (EUR 0.3bn underlying, EUR 0.2bn FX), a EUR 50m cash‑flow uplift in Q1, and roughly EUR 10m lower interest expense; segment metrics supporting the outlook included Holiday Experiences hotel ADR +5% (winter) and occupancy excl. Jamaica +1%, Cruise capacity +16% with occupancy +3% (near 100%) and Marella winter rate +5%, Markets & Airlines EBIT +EUR 10m with load factor +1%, while Jamaica caused one‑offs of ~EUR 15m (hotels) and ~EUR 6m (airlines) that should materially normalize by Q2 (impact down to 5–10%); management noted up to ~15 aircraft deliveries will lift the balance sheet but expects further net‑debt improvement over the year, has hedges in place, is reinstating dividends (AGM approval/payment process in place) and targets a dividend policy of 10–20% of underlying EPS going forward.TUI AG Financial Statement Overview
Summary
Profitability and revenue have recovered meaningfully versus 2021–2022 and operating cash flow/free cash flow are consistently positive, but the balance sheet remains the main constraint with high leverage (debt-to-equity ~2.5x) and only modest debt coverage from cash flow. Recent TTM shows a modest revenue decline (-4.5%) and volatile/negative recent FCF growth, which adds cyclical sensitivity.Income Statement
TTM (Trailing-Twelve-Months) profitability has meaningfully improved versus the loss-making period in 2021–2022, with positive net income and solid operating profit margins for a travel services business. Revenue rebounded strongly from 2022–2024, supporting earnings momentum, but the latest TTM shows a modest revenue decline (-4.5%) and gross margin remains relatively thin, leaving results more exposed to demand swings and cost pressure.72
Positive
Balance Sheet
Leverage remains the key constraint: total debt is high relative to equity (debt-to-equity ~2.5x in the most recent periods), which reduces flexibility in a cyclical industry. Equity has improved from negative levels in 2021–2022 to positive in 2023–2025, and returns on equity are currently strong, but the capital structure is still debt-heavy and more vulnerable if travel demand softens or financing costs rise.41
Neutral
Cash Flow
Cash generation is a clear strength, with consistently positive operating cash flow and free cash flow across 2022–TTM (Trailing-Twelve-Months), and free cash flow representing a healthy portion of net income. That said, free cash flow growth is volatile and negative in the latest periods (TTM and 2025 annual), and cash flow covers only a modest share of total debt, which limits deleveraging speed.68
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 24.17B | 24.18B | 23.17B | 20.67B | 16.54B | 4.73B |
| Gross Profit | 2.01B | 2.22B | 1.95B | 1.61B | 931.60M | -1.22B |
| EBITDA | 2.06B | 1.84B | 2.22B | 1.44B | 1.08B | -1.27B |
| Net Income | 677.60M | 635.90M | 507.10M | 305.80M | -212.60M | -2.48B |
Balance Sheet | ||||||
| Total Assets | 16.76B | 18.48B | 17.42B | 16.15B | 15.26B | 14.16B |
| Cash, Cash Equivalents and Short-Term Investments | 1.56B | 3.13B | 2.21B | 2.11B | 1.82B | 1.09B |
| Total Debt | 6.91B | 4.44B | 4.54B | 4.22B | 5.20B | 6.48B |
| Total Liabilities | 14.08B | 15.79B | 15.64B | 14.21B | 14.61B | 14.57B |
| Stockholders Equity | 1.70B | 1.76B | 956.40M | 1.12B | -141.60M | -1.09B |
Cash Flow | ||||||
| Free Cash Flow | 1.15B | 989.60M | 1.20B | 971.10M | 1.56B | -451.00M |
| Operating Cash Flow | 1.98B | 1.73B | 1.91B | 1.64B | 2.08B | -151.30M |
| Investing Cash Flow | -791.30M | -771.70M | -604.30M | -492.20M | -308.20M | 704.70M |
| Financing Cash Flow | -1.19B | -656.90M | -531.40M | -834.60M | -1.63B | -233.50M |
TUI AG Technical Analysis
Negative
8.08
Price Trends
8.82
Negative
8.21
Negative
7.95
Positive
Market Momentum
-0.24
Positive
39.63
Neutral
21.22
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:TUI1, the sentiment is Negative. The current price of 8.08 is below the 20-day moving average (MA) of 8.56, below the 50-day MA of 8.82, and above the 200-day MA of 7.95, indicating a neutral trend. The MACD of -0.24 indicates Positive momentum. The RSI at 39.63 is Neutral, neither overbought nor oversold. The STOCH value of 21.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DE:TUI1.
TUI AG Peers Comparison
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.