Canaccord Genuity slashes target price on Go-Ahead Group

Analysts at Canaccord Genuity slashed their target price on transport operator Go-Ahead Group from 1,500.0p to 950.0p on Thursday after the Covid-19 pandemic took its toll on the firm.

Canaccord said the coronavirus pandemic was "clearly having a significant impact" on Go-Ahead's operations, especially its regional bus unit.

However, while the Canadian bank said there may very well be "a lasting impact on travel patterns", it believes a "significant proportion" of Go-Ahead's pre-Covid-19 traffic will return and expects that the group can "right-size its business" to protect margins if necessary.

"We have trimmed our forecasts for the coming years, reflecting a slower recovery for regional bus, and reduced our price target to 950.0p," concluded the analysts, who also reiterated their 'buy' rating on the stock.

"We expect a limited profit contribution in the current year, with a meaningful recovery in subsequent years. Rail is expected to break-even, with modest de-risked UK profits offset by overseas losses."