German travel giant TUI on Tuesday posted a quarterly profit of 6 million euros ($6.46 million), defying expectations on the back of upbeat travel demand.

The swing to profit vastly outstripped an analyst consensus forecast for a 102 million euro loss in underlying earnings before interest and taxation (EBIT), according to LSEG data. For the same quarter last year, Europe’s largest travel operator posted a 153 million euro net loss.

The group’s fiscal first-quarter revenue came in at a record 4.3 billion euros, up by 15% from the previous year, driven by higher demand at increased prices and rates.

Shares rose as much as 6% after the market open, but have since pared gains to just above 3% during early trade in Europe.

“We are on track, we are gaining customers and we are growing. We are accelerating our transformation quarter by quarter. We have goals that we are consistently implementing,” TUI CEO Sebastian Ebel said in a statement.

“In a persistently challenging environment, people’s high willingness to travel ensures strong economic development in all areas of the Group.”

Tui expects to record growth in operating profit of at least 25% across the 2024 financial year and is targeting a compound annual growth rate of 7-10% over the medium term.

A total of 3.5 million guests travelled with TUI during the three-month reporting period, up from 3.3 million the previous year.

Deutsche Bank analysts noted on Tuesday that TUI’s share price “is still suffering from a very significant discount,” trading at just 0.2 times enterprise value to sales and at a 5.3 times estimated price to earnings ratio for 2024, versus a historical average of 0.5x EV/Sales and 14x P/E.

“Out of these especially low level of valuation multiples, the year-to-date performance of the stock has been particularly poor (-3.9% YTD for the German listing and -5.5% for the London listing) compared to both the Stoxx 600 (c. +1.8%) and the Stoxx T&L (c. +9.2%),” Deutsche Bank analysts said, reiterating a “buy” rating on the stock.