Canaccord slashes target for National Express but eyes recovery in 2021-22

But they stood by their 'buy' recommendation for the stock, pointing to the group's "strong" customer relationships and historically best-in-class margins in all its businesses to back up their investment thesis, labelling the firm a "quality operator".

Neither did it have any liquidity concerns, putting it in a good position to weather the storm and the significant follow-on impact to earnings in the near-term.

Even so, with divisional revenue growth set to slow to 0-1.5%, its target price based on discounted cash flows came down from 425.0p to 255.0p.

Indeed, the company was now seen posting an operating loss in 2020, with the UK coach business, which receives no government support, set to be especially weak in the second half, albeit followed by a recovery over the next two years.

The firm's margings were also seen falling below their historical levels and the analysts assigned the company's so-called 'terminal growth' zero value.

"While the decent level of revenue support across the Group is positive, it is unlikely to prevent the Group from reporting an adjusted operating and pre-tax loss for the full year, the broker said.

"Looking further ahead, the UK and Spanish governments have recently introduced additional measures to tackle the pandemic and manage the spike in infections; therefore, we believe that social distancing measures, travel restrictions and working from home guidelines are likely to impact travel demand throughout the winter and spring of next year, and possibly beyond that.

"In North America, we also expect the challenging conditions to persist into the new year."