Is this stock a bargain or a falling knife to avoid after a 10% slump?
Shares in TUI Travel (LSE: TUI) took a 10% hit Friday morning when it told us it now expects to see €200m (£173m) knocked off its profits this year after the grounding of Boeing’s 737 Max fleet. Instead of the previously “broadly flat” earnings outlook, the company is now expected to record a 17% EBITA fall.
The planes have been stopped from flying after their fancy stall-prevention system has been implicated in crashes of Lion Air and Ethiopian Airlines flights, and TUI’s estimated costs are based on a return to service no later than mid-July. If that doesn’t happen, EBITA could fall by as much as 26%.
This morning’s share price dip accelerated the fall that’s been going on for the past year, with TUI shares now down 35% since their May 2018 peak.
https://www.fool.co.uk/investing/2019/0 ... -10-slump/