Broker snap: TUI's strong first half prompts moderate upgrades

11th May 2011 12:09

Credit Suisse keeps its 'neutral' rating on tour operator TUI Travel, but raises its earnings estimates after strong first half results.The broker said that company - which owns First Choice and Thomsons - reported a "solid first half performance" on Tuesday (driven by a £23m Canadian turnaround) and more positive-than-expected comments on the UK outlook.These factors have prompted Credit Suisse to upgrade its 2011 earnings per share (EPS) forecasts by 4% and target price to 240p (from 235p).However, with the group trading on a 45% price-to-earnings ratio premium (in 2011 and 2012) over sector peer Thomas Cook, Credit Suisse remains cautious, keeping its 'neutral' stance. The broker continues to prefer Thomas Cook, for which it keeps an 'outperform' rating.---BC