Canaccord hikes target price on Go-Ahead

Analysts at Canaccord Genuity hiked their target price on public transport operator Go-Ahead Group from 1,135.0p to 1,540.0p on Thursday, stating the group was now in the process of preparing for "a strong recovery".

Canaccord said the Covid-19 pandemic continued to have "a significantly negative impact" on Go-Ahead's financial performance but noted prospects were now improving as the UK's vaccination programme would likely" bring the pandemic under control" in the coming months.

While the Canadian bank stated Covid-19 may have "a lasting impact" on travel patterns, it believes "a significant proportion" of the company's pre-pandemic traffic will return and stated that if not, it could also "right-size" its operations in order to restore and protect profit margins.

"Despite a strong recovery over the past 12 months, the shares trade at a discount to pre-pandemic levels of close to 50%. We retain our 'buy' recommendation," concluded Canaccord.