Daily Management Review

Thomas Cook Downgraded by Berenberg after Three More Analyst Agencies did the same Last week


08/05/2015




Thomas Cook Downgraded by Berenberg after Three More Analyst Agencies did the same Last week
Cutting its rating to ‘sell’ from ‘hold’, analysts at Berenberg downgraded Thomas Cook on Wednesday for showing no improvement in its performance.

This resulted in the share prices of the tourism operator falling by almost 1 percent 117.40p as Berenberg also set a target price of 100p, from 130.

The rating agency was critical of the business performance of Thomas Cook saying that the business of the company is challenged structurally and the underlying performance of the tour operator is slowing.

“We would argue that there is no sign of the structural headwinds abating and that operational recovery is predominantly cyclical rather than any sustainable structural revival,” said a note by the analysts at Berenberg.  

The analysts predicted that the company would not be able to achieve its earnings targets for fiscal year 2916 and would miss it by a margin of 10 percent.

“We do not believe that the challenges faced by TCG are reflected in consensus estimates and we are likely to see further negative earnings pressure in this and the next financial year,” said a communiqué from Berenberg.

Some degree of benefits was derived by the Thomas Cook after its recent partnership with Chinese conglomerate Fosun. But that was not enough to sustain the significant competitive pressures on the market.

The price target announced by berenberg for THomar Cook of a GBX 100 ($1.56) from an earlier price target of GBX 130 ($2.03) is indicative of the potential downside of 15.61% from the stock’s current price.

The Thomas Cook group has been has also been lowered by other agencies as well.

The price target on Thomas Cook Group plc was lowered by the Jefferies Group from GBX 165 ($2.58) to GBX 145 ($2.26) and advised investors to “sell” shares of the company on Wednesday.

Earlier last week, Stifel Nicolaus had held a “buy” rating for Thomas Cook with a target price of GBX 145 ($2.26) on shares of the company on July 31st.

The target price for Thomas Cook was also cut by Nomura as they set a “neutral” rating for the company in a research report also announced on July 31st.

An “equal weight” rating and a price target of GBX 122 ($1.91) on shares of Thomas cook was also made by Barclays.

Overall, Thomas Cook stocks have been rated with ‘sell’ by three equities research analysts while six such analysts have issued a ‘hold’ rating. Nine analysts have suggested buying of the company shares.  

The United Kingdom-based leisure travel company has operations in 14 source markets across Europe that include Tjareborg, Neckermann, Condor, JetTours, Ving, Spies and Thomas Cook. There are four primary business segments that the company operates in which are Continental Europe and Ireland, Airlines Germany, United Kingdom and Northern Europe.

The company has 847 retail outlets and 31 aircrafts operate and each section has a number of aircrafts and retail outlets.

(Source: www.dakotafinancialnews.com & www.streetinsider.com)






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