Nomura reiterates TUI's 'buy' rating

TUI AG’s ‘buy’ rating and target price of €22.60 (£17.85) were left unchanged by Nomura after the company said summer holidays were higher than last year.

The group said it is was on track to meet its target of growing core earnings by at least 10% this year as it reported a 2% increase in summer bookings.

Tui sold 47% of its summer holiday programme, in line with last year, and at 1% higher average selling prices, meaning revenue from the programme has been lifted 3%.

“This compares favourably with Thomas Cook, which last week reported bookings down 5% year-on-year and pricing unchanged, demonstrating, in our view, a superior product (differentiated) and its proven ability to quickly reshape programme in the light of geopolitical events,” Nomura said.

The cruise arm was said to be delivering continued growth, driven by strong demand for the latest in the Mein Schiff cruise ships, which is due to be launched this July.

The first half of the year has been focused on the winter programme, which has closed out almost fully sold at 95%.

“We forecast 14% earnings per share compound annual growth rate (2015-18), which is well supported by structural growth at its market-leading tour operator division, its cruise division expansion plans, its hotel roll-out programme and merger synergies,” said Nomura.

“We therefore retain our ‘buy’ rating.”

Shares rose 5.35% to 1,083p at 1037 BST.