TUI’s Split Personality: Cruise Unit Soars as Parent Hits the Rocks

TUI shares hit a 52-week low after a profit warning, while its cruise subsidiary gets a ratings upgrade. Analysts see 76% upside despite geopolitical headwinds.

The Hannover-based travel giant is telling two very different stories right now. While TUI’s cruise subsidiary is charting a course for growth, the parent company is struggling to stay afloat amid a perfect storm of geopolitical turmoil and consumer caution.

Shares in TUI have tumbled roughly 31 percent since the start of the year, touching a fresh 52-week low of €6.15 on Thursday. The sell-off accelerated after the group issued a profit warning on April 22, slashing its adjusted EBIT forecast for fiscal 2026 to a range of €1.1 billion to €1.4 billion and suspending its revenue guidance entirely.

A Tale of Two Businesses

The contrast between TUI’s divisions could hardly be starker. On the cruise side, S&P Global Ratings upgraded its outlook for TUI Cruises from “stable” to “positive” on April 27, while affirming the long-term rating at “BB-.” The agency expects the unit to generate €2.85 billion in revenue this fiscal year, with EBITDA climbing to around €1.018 billion.

The catalyst is the upcoming delivery of the Mein Schiff Flow in June 2026, which is expected to drive capacity growth of seven percent. That expansion should more than compensate for the delayed return of the Mein Schiff 4 and Mein Schiff 5, both of which were stranded in Abu Dhabi and Doha during the Middle East crisis. TUI had to repatriate roughly 5,000 cruise passengers from the region. Crucially, fuel and currency risks are largely hedged through 2027, insulating the cruise arm from external shocks.

The picture on the parent-company level is far less rosy. In the Markets & Airline segment, booked summer revenues are running seven percent below last year’s levels, as customers steer clear of destinations including Turkey, Cyprus and Egypt. The Iran conflict alone cost the group around €40 million in March.

Analysts Hold the Line

Despite the profit warning, the analyst community remains broadly bullish. Barclays trimmed its price target to €9.00 from €10.50 but kept an “Overweight” rating. Deutsche Bank cut its fair value to €10.50 from €12.00, maintaining a “Buy” recommendation. JPMorgan adjusted its target to €12.50 while sticking with “Overweight.”

The average price target now stands at roughly €10.81 — implying nearly 76 percent upside from current levels. The logic behind the optimism: the second quarter exceeded expectations, and estimates for 2027 and 2028 remain largely intact. The market’s faith in TUI’s medium-term recovery appears unshaken, even as short-term headwinds batter the stock.

Technical Signals Flash Warning

The selling pressure has pushed the relative strength index to 23, deep into oversold territory. The annualized volatility of around 49 percent underscores just how jittery the market has become. Short sellers have been circling, betting that the geopolitical drag will persist.

What Comes Next

All eyes are now on May 13, when TUI reports its first-half results. Analysts are forecasting a loss per share of €0.534 for the second quarter, an improvement from the €0.60 loss a year earlier. Quarterly revenue is expected to come in at roughly €3.71 billion.

The numbers will reveal whether the group can hold its revised guidance in the face of continued headwinds — or whether another downgrade is in the cards. Until then, the gap between analyst price targets and the market’s verdict remains unusually wide, leaving investors to decide which TUI story they believe.