Broker snap: Sell Thomas Cook, recommends Prime Markets

12th Jul 2011 11:16

Prime Markets suggests selling Thomas Cook shares into any strength up to its interim management statement on 11 August.The travel operator issued a profit warning for the third quarter on Tuesday, with underlying operating profit for the three months ended 30 June likely to be £5m lower than expectations at £20m. Full-year figures are now expected to be below estimates."For chartists, the profits warning from Thomas Cook this morning will come as no great surprise given the year-to-date performance, well-documented troubles in the Middle East and North Africa and the gradual death by a thousand cuts effect of UK austerity measures," said head of dealing Richard Curr.While the broker notes that a lot of bad news is already in the firm's share price, it believes that the "ongoing uncertainty, fragile economy and resulting poor sentiment" will provide more downward pressure. "Sell into any strength down to 100p," Prime Markets recommends.BC