Broker snap: Economy clouds 2010 outlook for Thos. Cook

30th Sep 2009 11:37

The trading update from travel group Thomas Cook has received a mixed reception, despite the company talking up a strong finish to the summer season.'The group is not planning to cut capacity further but the trend towards later booking and the distinct possibility of a consumer double dip as taxes, interest rates and unemployment rates rise next year means that visibility is very limited,' argues Astaire & Partners analyst Mark Brumby.Brumby said the company is 'doing pretty much everything right' but 'economic uncertainty and the belief that consumers will scrutinize large-ticket items of expenditure very closely next year lead us to rate the shares a hold.'Panmure Gordon retains its 'buy' recommendation, however, saying the shares are underpriced on a projected 2010 earnings multiple of 7.5 and supported by a dividend yield of 4.5%. The broker has a 310p price target for the shares.