Market report: City turns against Thomas Cook as planes arm sale is dubbed no-flyer

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Another day, another slap around the chops for Thomas Cook, the ailing tour operator which increasingly looks as though it needs a holiday from the stock market. Or perhaps a more long-term break from present management.

Last week Cook’s latest cunning plan was to ponder the sale of its planes — this would apparently be a great idea since they all have established slots at top airports and are always at least half-full with the company’s own holidaymakers.

Those 103 planes could raise more than £1 billion, we were told, an amount that looked toppy to anyone who’s flown inside one.

And if the planes really are worth £1 billion, why is the entire company’s stock market value below £500 million?

Analysts at Berenberg joined the sceptics today, asking whether the strategic review of the airline makes sense, not least since if they make a hash of it (not entirely without possibility), the shares will fall further which would “all but make a capital raise impossible”.

The shares, down 75% this year, moved up almost 1p to 30p today. Berenberg’s Stuart Gordon thinks even that’s too optimistic, telling clients the stock is worth just 12p.

In general, today was an up-day, although sluggishly so. One trader moaned there was “absolutely no sex or violence whatsoever” — much like, he admitted, his weekend.

Markets across Europe opened higher as trade talks between the US and China resumed. Miners did well, with Evraz up 9.4p at 526.6p and Fresnillo climbing 17p to 958.9p. That saw the FTSE 100 stay comfortably above the 7000 mark, 63.24 points higher at 7134.42.

The more UK-focused FTSE 250 followed suit, up 93.88 points at 18,746.76.

TalkTalk, nearly as unloved as Thomas Cook, was biffed by a negative note from HSBC which put a fair value for the stock at 86p. Shares fell 2p to 95p.

TalkTalk chairman Sir Charles Dunstone is one who thinks HS2 should be binned and a slug of the money saved spent on ultra-fast wi-fi. That might help his shares, we suppose.

Merlin — owner of Alton Towers, Legoland and Madame Tussauds — might be a beneficiary of quicker train rides between London and Birmingham. BoAMerrillLynch reinstated its coverage of Merlin today with a Buy recommendation, claiming the shares are worth 420p. They’ve a way to go and edged up 1p to 351p.

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February 12, 2019 |
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