Broker snap: Downside UK risk at Thomas Cook

29th Mar 2011 10:33

Credit Suisse thinks that Thomas Cook's mixed second quarter trading update is already priced-in, as the travel firm has underperformed the sector by 8% since mid-January. The statement confirmed an unchanged £20m cost impact from Egypt/Tunisia whilst capacity for the summer is adjusted principally to reflect a softer UK consumer."We leave forecasts unchanged but see downside risk to UK and upside risk to Continental Europe profits," said analyst Tim Ramskill.A cheap valuation supports the broker's 'outperform' rating, but Ramskill adds that a "greater certainty on summer trading may be required to trigger a reversal of recent underperformance in the shares." The target price stays at 256p.BC