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1. Company Snapshot

1.a. Company Description

TUI 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.

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1.b. Last Insights on TUI1

TUI AG's recent performance was driven by strong EBIT growth, fueled by record bookings and resilient demand. The company's Q1 2026 earnings call highlighted positive trends, despite disruptions from the Melissa hurricane in Jamaica. A new dividend policy was introduced, and AI is being leveraged for enhanced operations. Additionally, the company's focus on customer experience is evident in its varied fees for extra legroom on flights, ranging from £5 to £200. The upcoming dividend payout is also expected to attract investors.

1.c. Company Highlights

2. TUI's Strong Q1 2026 Earnings: A Positive Outlook

TUI reported a significant improvement in its financial performance in Q1 2026, with EBIT increasing by EUR 26 million to EUR 77 million. The company's actual EPS came out at '-0.09', beating estimates of '-0.53414'. The improvement was driven by positive trading momentum in Holiday Experiences, Markets, and Airlines. The company's net debt improved by EUR 0.5 billion year-on-year, and it plans to return to dividend payments. TUI reconfirmed its EBIT guidance for 2026, expecting 7-10% growth.

Publication Date: Feb -16

📋 Highlights
  • EBIT Growth:: Q1 2026 EBIT rose by EUR 26 million to EUR 77 million, driven by Holiday Experiences (+EUR 18 million) and Markets/Airlines (+EUR 10 million).
  • EBIT Guidance Confirmed:: Reiterated 2026 EBIT growth guidance of 7-10%, with underlying EPS expected to rise 10-20% despite a EUR 400 million revenue decline.
  • Net Debt Reduction:: Net debt improved by EUR 0.5 billion YoY, supporting dividend resumption and financial flexibility.
  • Dynamic Packaging Expansion:: Dynamic capacity is projected to grow 8% in 2026, contrasting with low single-digit risk capacity declines, enhancing margin protection.
  • Cost Efficiency Gains:: Cost-cutting measures reduced expenses by 30% (from EUR 250 million), offsetting wage inflation and distribution costs, bolstering confidence in EBIT growth.

Segmental Performance

The company's Holiday Experiences segment saw an improvement of EUR 18 million, with Cruise showing significant growth despite a 16% increase in capacity. Markets and Airlines improved by EUR 10 million, driven by the positive impact of dynamic packaging. The shift to dynamic packaging aims to preserve margin, and the direction of travel is towards more dynamic packaging, irrespective of the cost environment.

Operational Highlights

The hotel KPIs were impacted by the Melissa hurricane in Jamaica, with a EUR 15 million effect, which is expected to reduce to 5-10% in Q2. The occupancy rate is expected to normalize by the end of Q2. The company is seeing strong demand for river cruises, and the market opportunity is significant, but with limited capacity due to harbor slots.

Valuation and Outlook

TUI's current valuation metrics, including a P/E Ratio of 6.78, P/B Ratio of 2.45, and EV/EBITDA of 2.63, indicate a relatively attractive valuation. Analysts estimate next year's revenue growth at 2.7%. The company's guidance remains unchanged, reflecting confidence in its transformation for growth. With a focus on protecting margins and filling risk capacity, TUI is well-positioned for a strong summer season.

Cost Management and Profitability

The company has implemented cost-cutting measures, including a 30% reduction in costs from EUR 250 million, which will contribute positively to its profitability. However, TUI faces wage inflation, overhead, and distribution cost inflation. The company's better cost structure and higher efficiency will support its growth, with expectations of strong EBIT growth year-over-year.

3. NewsRoom

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TUI AG (TUIFF) Q1 2026 Earnings Call Highlights: Resilient Performance Amid Challenges

Feb -10

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Should You Buy TUI AG (ETR:TUI1) For Its Upcoming Dividend?

Feb -06

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Cheapest and priciest airlines for extra legroom revealed

Jan -13

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TUI AG (TUIFF) Q4 2025 Earnings Call Highlights: Record Performance and Strategic Investments

Dec -10

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Tui sees earnings take off, but outlook more modest for 2026

Dec -10

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TUI Shares Fall on Light Winter Bookings Despite Earnings Growth

Dec -10

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Should You Investigate TUI AG (ETR:TUI1) At €7.85?

Nov -26

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Is There Opportunity in TUI Shares After Q2 2025 Earnings Recovery?

Oct -06

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.75%)

6. Segments

Markets and Airlines - Northern Region

Expected Growth: 2.5%

TUI AG's Northern Region, comprising markets and airlines, achieves 2.5% growth driven by increasing demand for summer holidays, strategic capacity management, and cost savings from fleet modernization. Additionally, the region benefits from a strong brand presence, successful yield management, and a growing online booking platform.

Markets and Airlines - Central Region

Expected Growth: 2.8%

Strong demand for summer holidays, increased capacity in core markets, and successful yield management strategies drove 2.8% growth in Central Region's Markets and Airlines segment for TUI AG. Additionally, investments in digitalization and customer experience enhancements contributed to the segment's growth.

Markets and Airlines - Western Region

Expected Growth: 3.2%

TUI AG's Western Region Markets and Airlines segment growth of 3.2% is driven by increasing demand for leisure travel, particularly in the UK and Nordics. Capacity expansion, improved yield management, and strategic partnerships also contribute to growth. Additionally, the region's strong economy, low unemployment, and rising consumer spending power support the segment's upward trend.

Hotels & Resorts

Expected Growth: 2.2%

TUI AG's Hotels & Resorts segment growth of 2.2% is driven by increasing demand for all-inclusive holidays, expansion into new markets, and strategic partnerships. Additionally, investments in digitalization and refurbishment of existing properties have improved customer experience, leading to higher occupancy rates and revenue growth.

TUI Musement

Expected Growth: 3.5%

TUI Musement's 3.5% growth driven by increasing demand for experiential travel, expansion into new markets, and strategic partnerships. The segment benefits from TUI AG's strong brand recognition, investments in digitalization, and a growing focus on sustainable tourism. Additionally, the rise of online booking platforms and the increasing popularity of local experiences also contribute to the segment's growth.

Cruises

Expected Growth: 2.9%

TUI AG's cruise segment growth of 2.9% is driven by increasing demand for premium and luxury cruise experiences, expansion into new markets, and strategic partnerships. Additionally, investments in digitalization and sustainability initiatives have improved operational efficiency and enhanced customer experience, contributing to the segment's growth.

All Other

Expected Growth: 2.1%

TUI AG's 'All Other' segment growth of 2.1% is driven by increasing demand for travel-related services, expansion into new markets, and strategic partnerships. Additionally, the company's focus on digitalization and cost savings initiatives have contributed to the growth. Furthermore, the segment has benefited from the recovery of the global travel industry, post-pandemic.

7. Detailed Products

Package Holidays

TUI AG offers a wide range of package holidays to various destinations worldwide, including beach holidays, city breaks, and adventure travel.

Cruises

TUI AG operates a fleet of cruise ships, offering a variety of itineraries and onboard experiences.

Hotels and Resorts

TUI AG owns and operates a portfolio of hotels and resorts, offering a range of accommodation options from budget-friendly to luxury.

Flights

TUI AG operates a fleet of aircraft, offering scheduled and charter flights to destinations worldwide.

Travel Services

TUI AG provides a range of travel services, including travel insurance, car rentals, and excursions.

Destination Services

TUI AG offers a range of destination services, including airport transfers, excursions, and activities.

8. TUI AG's Porter Forces

Forces Ranking

Threat Of Substitutes

TUI AG operates in a highly competitive industry, and customers have various alternatives for travel and tourism services. However, the company's strong brand recognition and diversified product offerings mitigate the threat of substitutes to some extent.

Bargaining Power Of Customers

TUI AG's customers have significant bargaining power due to the availability of numerous travel and tourism service providers. The company's large customer base and high customer loyalty help to reduce this power to some extent.

Bargaining Power Of Suppliers

TUI AG has a diversified supplier base, which reduces the bargaining power of individual suppliers. The company's large scale of operations and long-term contracts with suppliers also help to mitigate the bargaining power of suppliers.

Threat Of New Entrants

The threat of new entrants in the travel and tourism industry is relatively low due to the high barriers to entry, including significant capital requirements and regulatory hurdles. TUI AG's established brand and extensive distribution network also make it difficult for new entrants to gain a foothold.

Intensity Of Rivalry

The travel and tourism industry is highly competitive, with numerous players competing for market share. TUI AG faces intense competition from online travel agencies, low-cost carriers, and other tour operators, which puts pressure on its pricing and profitability.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 78.82%
Debt Cost 14.73%
Equity Weight 21.18%
Equity Cost 15.48%
WACC 14.89%
Leverage 372.21%

11. Quality Control: TUI AG passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Lagardere

A-Score: 6.1/10

Value: 6.8

Growth: 6.9

Quality: 4.2

Yield: 6.2

Momentum: 3.0

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Expedia

A-Score: 5.3/10

Value: 3.8

Growth: 6.6

Quality: 7.1

Yield: 1.0

Momentum: 8.5

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Tripadvisor

A-Score: 4.7/10

Value: 7.1

Growth: 4.1

Quality: 6.4

Yield: 0.0

Momentum: 7.0

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
Pandox

A-Score: 4.5/10

Value: 3.0

Growth: 5.4

Quality: 4.5

Yield: 2.5

Momentum: 4.0

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Continental

A-Score: 3.9/10

Value: 5.1

Growth: 3.3

Quality: 2.6

Yield: 5.6

Momentum: 4.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
TUI

A-Score: 3.8/10

Value: 8.0

Growth: 4.0

Quality: 3.9

Yield: 0.0

Momentum: 4.0

Volatility: 2.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

8.45$

Current Price

8.45$

Potential

-0.00%

Expected Cash-Flows