Liberum lowers target price on National Express, remains confident of sector recovery
Mobico Group
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16:40 19/04/24
Analysts at Liberum lowered their target price on public transport operator National Express from 385.0p to 340.0p on Tuesday but said it remained confident of the sector's recovery.
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Liberum stated National Express faces some short-term headwinds from "a slower relaxation of pandemic restrictions" and "tougher competition" at its long-distance coach units.
However, the analysts said they "remain confident" in travel demand recovering fully in 2022, with non-volume risk contracts and school bus operations providing "a sound base to build a recovery" in more volume-sensitive and discretionary demand operations.
Liberum, which reiterated its 'buy' rating on the stock, noted that the dominant impact on its revised forecasts for the current year was the decelerated pace at which Covid-19 restrictions were being lifted in all of the primary countries in which National Express operates.
"This postpones the start of the recovery further into H2. The large percentage reduction in our 2021E estimates reflects the depressed level of profits more than a large change in our assumptions," said Liberum, which added it now also has "more conservative assumptions" in the UK and at Alsa in order to reflect increased levels of competition against each of those divisions' long-distance coach units.