Broker snap: Thomas Cook outshines TUI

24th Mar 2010 12:49

Holiday firms were in focus on Wednesday morning after TUI Travel issued an upbeat trading statement.Despite the positive noises emanating from TUI, broker Panmure Gordon has still cuts its rating for the firm from 'buy' to 'hold'.'We leave our 2010 forecasts unchanged and retain our 325p price target but downgrade our recommendation from buy to hold on valuation grounds; we prefer Thomas Cook where we have a 315p price target and a buy recommendation,' the broker said.KBC Peel Hunt is another that thinks TUI shares are now fairly priced. 'We are prevented from turning more positive by concerns that large-ticket discretionary expenditure in the UK may come under pressure post the general election,' said KBC analyst Nick Batram.Talking of Thomas Cook, TUI's big rival received a lift from HSBC, which said it would be upgrading its medium term earnings forecast for the company, though it maintains its 'overweight' rating and 315p price target. 'Visibility for 2010 trading is limited, but a recovery in consumer confidence and weak comparisons bode well. Foreign exchange and industry capacity increases remain risks, but are more than priced in on current valuation,' HSBC said.