Broker snap: Panmure prefers Thomas Cook to TUI Travel

26th Sep 2013 11:19

TUI Travel remains a high-quality tour operator according to Panmure Gordon, but the broker's preference in the sector remains for Thomas Cook.TUI Travel impressed the market on Thursday after saying that trading has been slightly ahead of expectations due to a strong summer season and decent early bookings for winter holidays.The firm is now targeting at least 11% underlying operating profit growth for the 12 months ending September 30th and growth of 7-10% next year."We believe TUI will benefit from weaker comparatives and further benefits from the business transformation programme likely to underpin the group's targets for FY2014," said analysts at Panmure.The broker, which kept its 'hold' rating and 315p target price for TUI, said that the stock trades 11.2 times next year's expected earnings."Whilst we believe TUI Travel provides solid growth, with a decent yield and a high quality management team, we believe there remains more upside potential at Thomas Cook whilst trading on a lower rating."Nevertheless, Panmure said: "We note TUI Travel remains a high quality operator with, solid growth prospects, robust balance sheet and a strong management team."The shares were up 1.71% at 362.5p by 11:18.BC