TUI Share Price Explained: TUI Stock Trading Guide

TUI Group (TUI1.DE), or Touristik Union International ("Tourism Union International"), is a German-based multinational tourism company that offers airlines, cruise ships, hotels, travel agencies, and tour operators. Like many travel companies, TUI's share prices were affected by the pandemic. As travel and tourism re-emerge as growth industries, traders closely monitor stock prices within the tourism sector.

This comprehensive guide to trading TUI stocks gives an overview of the business, historical price movements, and key factors influencing TUI's share prices. It covers TUI1.DE CFD trading, including potential trading strategies and risk management techniques.

By the end of this guide, you'll gain an understanding of trading TUI AG shares and be equipped with information and insights to enhance your trading decisions.

TL;DR

• TUI AG, one of the largest travel companies in the world, is based in Germany and traded on the Frankfurt Stock Exchange.
• TUI Group, originally Preussag, transitioned from a coal mining company to a tourism giant by acquiring Hapag-Lloyd in 1997 and rebranding as TUI AG in 2002.
• Trading TUI stocks can be done through various methods, including traditional stock trading, futures contracts, options trading, and CFDs.

Understanding TUI Group and TUI AG Stock

German-based company TUI Group, also known as TUI AG, is one of the world’s largest leisure, travel, and tourism companies.

TUI Group began as Preussag, a state-run coal mining and steel company established in 1923 by the Prussian Parliament. It initially operated from Berlin with a capital stock of 500,000 Goldmark. TUI Group entered the tourism market in 1997 by acquiring one of Germany’s leading tourism companies, Hapag-Lloyd. The company changed its name to TUI AG in June 2002 and subsequently made additional acquisitions of travel operators.

In December 2014, TUI AG officially merged with TUI Travel to form TUI Group, creating the world's largest leisure and tourism company. As of July 2024, TUI Group operates five airlines, three cruise lines, and around 400 hotels, including renowned brands like RIU, TUI Blue, and Robinson.

In 2014, TUI moved its primary share listing to the London Stock Exchange, becoming part of the FTSE 250. However, in April 2024, TUI returned to the Frankfurt Stock Exchange as its primary listing, where it is now included in the MDAX performance index, featuring 40 of the largest and most liquid companies on that exchange.

Additionally, it is listed on the Hanover Stock Exchange and admitted to the electronic trading system Xetra. TUI's stock ticker may vary depending on the exchange: on Xetra, it is TUI1.DE.

In 2023, TUI reported over €17 billion euros (€) in revenue, over €14 billion in assets, and just over €455 million in net profits. As of July 2024, its market capitalisation is over €3 billion.

TUI1.DE Historical Performance

Shortly after entering the tourism market in 1997, TUI reached an all-time high on 19 July 1999 at €154.38. In January 2011, TUI's stock was valued at over €28. However, by November of the same year, it had dropped to below €12.

Following this low point in November 2011, TUI's stock began a steady upward trajectory despite experiencing occasional fluctuations. There were significant peaks, notably in February 2014, when the stock price surged above €36, and in May 2018, when it exceeded €55.

After the peak in May 2018, TUI's stock started to decline despite intermittent recovery periods. By February 2020, the stock had dropped to just under €20, and in March of that year, it fell further to just below €12, representing a 40% decrease in value within a month.

The stock experienced some recovery in 2021, reaching a peak of over €22 in February. However, it has been on a decline since then. As of July 2024, TUI1.DE is trading at just over €6.

What Moves TUI1.DE Share Values?

Share price movements are complex, with TUI's share price influenced by various interconnected factors. Here are some of the main ones:

• Corporate Performance: TUI's shift to profitability and record revenue growth drive its stock value significantly. For example, TUI's stock price increased by as much as 6% following a 13 February 2024 announcement of a quarterly profit of 6 million euros. Positive financial performance boosts trader confidence and can lead to a rise in stock value.
• Market Sentiment: The perception that TUI is undervalued compared to its peers can influence trader behaviour. For instance, if traders believe that TUI shares are trading below their estimated fair value, this could attract more buyers. This increased demand may increase the stock price as traders speculate on potential gains.
• Geopolitical Events and Public Health Crises: The tourism industry is sensitive to external shocks like geopolitical events and health crises. For example, during the COVID-19 pandemic, travel restrictions and lockdowns significantly dropped TUI's stock price. Similarly, any future geopolitical instability or health emergencies could negatively impact TUI's stock by reducing travel demand and causing operational disruptions.
• Corporate Actions: Corporate actions are decisions made by a company's management or board of directors that affect the company's stock or stakeholders. The strategic decision to consolidate TUI's listings from multiple exchanges to a primary listing on the Frankfurt Stock Exchange in April 2024 is a significant corporate action. This move aims to increase the visibility and attractiveness of the company's shares and may potentially streamline operations. It could also enhance trader confidence, leading to a positive response in the stock market.

How to Trade TUI Stocks

Trading TUI1.DE stock can be approached in several ways. The traditional method involves buying and selling shares on the stock market, either aiming to capitalise on short-term price movements or holding them for long-term growth.

Another option is through futures contracts, which involve agreeing to buy or sell TUI1.DE at a set price on a future date. You may also use Contracts for Difference (CFDs), which enables traders to speculate on price changes of TUI shares without owning the underlying asset.

Trading TUI1.DE CFDs

A CFD is a financial derivative monitored by financial regulators. When you buy or sell a CFD, you enter into a contract with a CFD provider to exchange the difference between the entry and exit prices. This type of trading allows you to speculate on the price movements of TUI1.DE.

Key Features of TUI AG CFD Trading

1. Speculating on Price Movements:
   
   • CFDs enable you to trade on both upward and downward price movements. If you believe TUI1.DE will rise in value, you can open a "Buy" (long) position. Conversely, if you expect the stock to fall, you can open a "Sell" (short) position.
2. Leverage:
   
   • CFD trading involves leverage, allowing you to gain greater exposure to TUI1.DE with a smaller initial capital outlay, known as margin. For example, a leverage ratio of 1:10 means you can control a position worth €100 with just €10. While leverage may increase your potential profits, it also magnifies your potential losses.
3. No Ownership of the Underlying Asset:
   
   • Trading CFDs means you do not own TUI1.DE shares. Instead, you trade based on the stock's price movements, avoiding some costs and complexities associated with owning the actual shares. However, this also means you do not have shareholder rights, such as voting rights or dividends.

Steps to Trade TUI1.DE CFDs

1. Choose a Reputable CFD Provider:
   
   • Select a CFD provider, like Plus500, offering a robust trading platform with real-time data, advanced charting tools, and risk management options like stop-loss orders.
2. Analyse TUI1.DE:
   
   • Perform both technical analysis and fundamental analysis to inform your trading decisions. This includes examining TUI AG's financial health, market position, and external factors such as geopolitical events and public health crises. Additionally, it involves analysing historical price data and trading volumes to identify patterns and trends.
3. Open a Position:
   
   • Based on your analysis, decide whether to go long or short. If you anticipate TUI1.DE's value rising, open a long position. If you expect it to fall, open a short position. Specify the amount to trade and set any stop-loss or take-profit levels to manage risk.
4. Monitor Your Trade:
   
   • Keep track of market movements and news affecting TUI1.DE. Adjust your stop-loss and take-profit levels to secure profits or minimise losses.
5. Close Your Position:
   
   • When closing your trade, your profit or loss will be the difference between the CFD's opening and closing prices. This amount will be added to or deducted from your trading account balance.

Risk Management Tools for TUI Trading

Managing risk is crucial due to the leveraged nature of CFD trading. Strategies include:

• Use Stop-Loss Orders: Close your position at a predetermined price to limit potential losses.
• Diversify Your Trades: Spread your trades across different assets to mitigate risk.
• Monitor Leverage: Use leverage cautiously, as it can amplify both gains and losses.

TUI Trading Hours

TUI1.DE stocks are traded on the Frankfurt Stock Exchange via the Xetra electronic platform. It is open Monday to Friday, 9am to 5:30pm, Central European Time (CET), which is GMT+1. Available trading hours via Plus500 may be different.

TUI Stock Trading Conclusion

TUI Group, one of the world's largest travel operators, is a significant European company included in the MDAX performance index. Various factors, including the global pandemic, geopolitical events, corporate performance, and market sentiment, influence TUI's stock prices.

Understanding these dynamics is crucial for informed trading decisions involving TUI shares or financial derivatives like CFDs. As the travel and tourism sectors recover, keeping these influences in mind will help traders navigate the market effectively.

If you’re interested in trading TUI CFDs, you can begin trading TUI1.DE CFDs on Plus500.