Jefferies stays at 'buy' on Go Ahead, likes portfolio and balance sheet

Analysts at Jefferies reiterated their 'buy' recommendation for shares of Go-Ahead Group, highlighting the attractions of its portfolio, especially its UK franchise and balance sheet positioning.

They also called attention to the fact that it remains cash generative and expected to have about £200m in unutilised facilities by year-end.

Indeed, cash available since end December 2019 had reduced because of £80m of UK rail cash being classified as restricted.

However, adjusted EBITDA-to-net debt was seen staying within management's target range of 1.5-2.5 times at year end.

Furthermore, Bank had confirmed its eligibility to up to £300m from the Covid Corporate Financing Facility.

Another "positive" was DfT's decision to support regional bus past June and Jefferies expected support to be sustained due to the critical nature of the services performed by Go-Ahead.

Jefferies also stood by its 1,710.0p target price for the shares.