What Happened?
Shares of business travel management company Global Business Travel Group (NYSE: GBTG) jumped 6.7% in the afternoon session after its parent investor, Certares, announced a partnership with Italian rail firm FS to promote high-speed rail over air travel.
The plan involved leveraging Certares’ travel-sector portfolio companies, which included American Express Global Business Travel, to encourage business and leisure travelers to switch from short-haul flights to high-speed trains. This shift was promoted as a more environmentally friendly, reliable, and cost-effective option. The collaboration presented an opportunity for the company to support its business customers in making this transition, potentially opening up new avenues for growth by directing corporate clients to these expanded rail services.
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What Is The Market Telling Us
American Express Global Business Travel’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 5 months ago when the stock gained 13.2% on the news that the company reported second-quarter financial results that surpassed expectations and raised its full-year guidance.
The company's revenue increased 1% year-over-year to $631 million, while adjusted EBITDA grew 4% to $133 million. In another positive development, the U.S. Department of Justice dismissed its lawsuit that challenged the acquisition of CWT. The strong performance prompted an analyst at Deutsche Bank to raise the price target on the stock while the firm maintained a 'Buy' rating. Management also announced plans to activate a $300 million share buyback program.
American Express Global Business Travel is up 6.7% since the beginning of the year, but at $8.03 per share, it is still trading 11.1% below its 52-week high of $9.03 from January 2025. Investors who bought $1,000 worth of American Express Global Business Travel’s shares 5 years ago would now be looking at an investment worth $773.87.
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