Flight Centre Travel's (ASX:FLT) outlook was positive despite travel concerns due to the US-Iran war, Jefferies said in a note on Wednesday, adding that smoother conditions appear ahead.

The investment firm said travel volumes have historically picked up when conflicts subside. With the possibility of a peace deal improving and Australian travel warnings beginning to ease, Jefferies expects conditions to improve.

However, the travel company's leisure business is expected to see a larger year-on-year decline in profit before tax owing to increased tensions ahead of the US-Iran memorandum of understanding. The brokerage now expects a 46% fall in Leisure's Q4 earnings and has trimmed its fiscal year 2026 estimates by 5%.

Jefferies maintained a buy rating and increased price target to AU$14.50 from AU$14.00.