Berenberg lowers target price on Applegreen

Berenberg acknowledged that like all businesses exposed to the travel market, Applegreen had a "tough" first-half. However, despite the "significant hit" to traffic volumes at the height of the Covid-19 pandemic, the analysts highlighted that the company generated "comfortably positive" underlying earnings in the period.

Since then, with the economy reopening and individuals remaining wary of public transport, the German bank pointed out that traffic had actually increased markedly, resulting in "a swift improvement" in Applegreen's trading and financial position.

"Thus, while we acknowledge leverage may be a concern for some investors, we envisage plenty of upside as the recovery continues and net debt declines," said the analysts, who also reiterated their 'buy' rating on the stock.

"While recent restrictions may slow the pace of recovery for a few months, we anticipate trading will, in general, continue to improve. We expect core Applegreen revenue to return to its 2019 level next year."