Canaccord Genuity upgrades FirstGroup to 'buy'

Analysts at Canaccord Genuity upgraded their stance on transport operator FirstGroup from 'hold' to 'buy' on Monday but noted that timing remained uncertain despite the firm's good value.

Canaccord said even though FirstGroup's operations were "significantly impacted" by the Covid-19 pandemic, it was important to remember that the company also provides essential services to the communities it serves.

The Canadian bank said demand was therefore likely to return once the crisis passes, although the analysts highlighted that it may, in fact, take years to fully recover.

Canaccord also pointed out that FirstGroup's North American disposal programme had unfortunately come to a standstill but noted that it expects the efforts to restart when visibility improves.

But despite fears around Covid-19's impacts on the group's prospects, Canaccord chose to upgrade its recommendation to 'buy' following a significant decline in the group's share price in recent months.

However, Canaccord did opt to move its target price on the stock down from 124p to 50p.