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Dow Jones – 15 Aug
0854 GMT [Dow Jones] Although FirstGroup (FGP.LN) has secured a contract for the UK West Coast Mainline franchise from Stagecoach (SGC.LN), the worry is that it will be unable to deliver on such a key route, says Mike van Dulken, Head of Research at Accendo Markets. “[FirstGroup] has promised lots of investment, but growth and profitability assumptions could be too much,” van Dulken says. Adds that the contract win seems to have been priced in, as FirstGroup has had a strong run since mid-July. Says this gives rise to the possibility for profit-taking, with today’s events another key catalyst. Shares down 6% at 244p.
This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
Accendo Markets considers opinions and information contained within the research to be valid when published, and gives no warranty as to the investments referred to in this material. The income from the investments referred to may go down as well as up, and investors may realise losses on investments. The past performance of a particular investment is not necessarily a guide to its future performance. Prepared by Michael van Dulken, Head of Research