Barclays downgrades Thomas Cook 'but may be wrong'

In November Barclays had upgraded the shares and set a target price of 100p, which has almost been breached, with the shares outperforming Tui and the FTSE 250 and is still facing a challenging market with growing concerns over the UK consumer.

"We believe the management team is doing all of the right things to make TCG a sustainable, profitable business," analysts wrote on Friday, saying the turnaround over the last five years has been impressive.

But Barclays acknowledged that downgrading to 'equalweight' from the previous 'overweight' rating "might be wrong" as earnings momentum may improve if Thomas Cook can successfully turn around Condor in Germany, deliver most cost savings, with the group's high financial leverage meaning a small change in EBIT has a big impact on EPS.