Canaccord edges up estimates for National Express following 'pleasing' interim results
Analysts at Canaccord Genuity took a fresh look at National Express on Wednesday, issuing the group with some new numbers following its "pleasing interim results".
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Canaccord said National Express was "a quality operator", capable of delivering "best in class" margins in almost all of its business units.
The Canadian broker expects to see "modest but sustained profit growth" from National Express in the coming years, driven by a combination of growth and acquisitions, something it believes will grant it the freedom required to continue its progressive dividend policy.
While Canaccord kept its 'buy' rating and 465p target price for National Express unchanged, on the back of the positive interim results, it edged up its forecasts for the group's current year and for beyond.
The UK, Spain and North America all achieved double-digit growth in operating profit, while National Express' German rail unit increased earnings by 9.1%.
Combined with a reduction in overheads, adjusted group operating profit rose 17.4% to £139.3m, while adjusted pre-tax profits rose 13.8% and adjusted diluted earnings per share were up 12.4%.
"We have edged up our earnings estimates for the coming years to reflect the slightly better than expected performance," said Canaccord, which upped its 2019 full-year sales estimates from £2.73bn to £2.73m and pre-tax profits expectations from £237.8m to £240.8m