Broker snap: Credit Suisse ups target price on Thomas Cook

7th Feb 2013 14:08

Shares in Thomas Cook got an extra boost on Thursday after Credit Suisse gave it a significantly higher target price of 93p (from 36p previously) on the back of a 'solid' first quarter performance. During the period the company identified cost savings of a further £60m, which Credit Suisse said lifts its full year 2014 earnings before interest and tax by £33m. It said the new 93p target price implies a 30% upside potential, and retained its 'outperform' rating on the stock. The broker pointed to the company's improved gross margins, which were up 130 basis points, as well as its sustained debt improvements since September 2012. The group's total cost savings for the full year 2013-15 are now at £240m. Thomas Cook reported an operating loss of £69.8m of the last three months of 2012, a 23% drop on the £91.1m loss in the previous year. Overall, loss before tax came to £127.9m, a 15% drop compared to the £151.7m reported for the same period a year ago. However, total revenues fell 7.3% to £1.72bn during the period and gross profit was down 3.5% to £377m for the period. NR