Jefferies cuts Go-Ahead to 'hold' and slashes price target

3rd Sep 2015 10:05

(ShareCast News) - Jefferies downgraded Go-Ahead to 'hold' from 'buy' and slashed its price target to 2,630p from 2,920p.While the company's full-year results were as expected, Jefferies cut its outlook on the one-year delay to reach the £100m bus EBIT target and its reduced expectations for rail.Go-Ahead said on Thursday that it now expects to deliver £100m of bus operating profit in 2016/17, a year later than originally anticipated."Whilst good growth remains in our group EPS forecasts and opportunities lie ahead, limited upside to our 2,630p sum-of-the-parts price target moves us to hold."Jefferies cut its 2016 earnings per share estimate by 11% to 172.6p and its 2017 estimate by 5% to 199.5p, saying the delay in the bus profit target and reduced near-term prospects for GTR profits shift the profile of its group forecasts out a year.It said risks include missing the bus EBIT target, developments in the Department for Transport's rail franchising programme and regulatory risks.At 1022 BST, Go-Ahead shares were down 4.9% at 2,411p.