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TUI AG (DE:TUI1)
XETRA:TUI1
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TUI AG
(XETRA:TUI1)
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Rating:60Neutral
Price Target:
€7.50
▲(13.46% Upside)
Action:ReiteratedDate:03/03/26
The score is anchored by improving fundamentals and constructive earnings-call guidance, but capped by a still highly leveraged balance sheet and currently weak price trend/momentum. Cheap valuation provides support, though it does not fully offset the financial-risk and technical weakness.
Positive Factors
Record Q1 underlying EBIT
A record Q1 underlying EBIT demonstrates restored operational profitability and operating leverage versus the loss-making years. This stronger earnings base supports durable cash generation, underpins management guidance, and provides a buffer for reinvestment, deleveraging or dividend policy over the next several quarters.
Net-debt improvement and balance-sheet actions
Material net-debt reduction and structural actions (lease restructuring, asset ownership changes, early convertible repayment) lower financing costs and increase flexibility. Those durable balance-sheet moves reduce refinancing risk and support the company’s ability to fund growth and maintain a resumed dividend policy over coming quarters.
Recovery in cruise and owned-hotel economics
Cruise capacity ramp and near-full occupancy plus rising hotel ADRs show pricing power in core owned assets. Vertical integration (hotels, cruises, packaging) sustainably enhances margins and cash flow, making revenue streams more predictable and giving the company lasting commercial leverage over distribution-driven peers.
Negative Factors
High leverage (debt-to-equity ~2.5x)
Persistent high leverage materially limits financial flexibility in a cyclical travel business, increasing vulnerability to demand shocks or higher rates. Even with improving equity, a ~2.5x debt/equity structure constrains investment choices, slows deleveraging and raises refinancing and covenant risk over the next several quarters.
Volatile, recently negative free cash flow growth
While operating cash flow is positive, recent negative and volatile free cash flow growth weakens the company’s ability to sustainably pay down debt or fund capex without external financing. This variability hampers predictable deleveraging, limits strategic optionality and heightens reliance on market access over coming quarters.
Revenue softness and thin gross margins
A modest TTM revenue decline coupled with relatively thin gross margins leaves profitability exposed to demand shifts and cost inflation. Structural margin tightness means that small revenue dips or price pressure can quickly erode earnings and slow balance-sheet repair, creating multi-quarter execution and cash-flow risk.
TUI AG (TUI1) vs. iShares MSCI Germany ETF (EWG)
Market Cap
€3.35B
Dividend YieldN/A
Average Volume (3M)2.37M
Price to Earnings (P/E)―
Beta (1Y)1.30
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
€10.40Price Target Upside57.34% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
EPS Forecast (FY)1.38
Revenue Forecast (FY)€24.59B
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 versus 2021–2022 and operating/free cash flow are consistently positive, but the balance sheet remains a major constraint with high leverage (debt-to-equity ~2.5x) and limited flexibility in a cyclical travel business. Latest TTM also shows a modest revenue decline and recent free-cash-flow growth has turned negative/volatile.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
6.61
Price Trends
8.18
Negative
8.14
Negative
7.93
Negative
Market Momentum
-0.46
Positive
30.84
Neutral
16.93
Positive
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 6.61 is below the 20-day moving average (MA) of 7.23, below the 50-day MA of 8.18, and below the 200-day MA of 7.93, indicating a bearish trend. The MACD of -0.46 indicates Positive momentum. The RSI at 30.84 is Neutral, neither overbought nor oversold. The STOCH value of 16.93 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DE:TUI1.
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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.