Liberum says FirstGroup rail prospects still bright despite bid failure

23rd May 2014 10:40

Prospects of new rail business for train and bus operator FirstGroup are still bright despite its failure on Thursday to win the new Thameslink deal, according to broker Liberum Capital.FirstGroup is still in with a chance of winning two of the other biggest rail franchises currently on offer, East Coast and Scotrail, despite losing out on Thameslink to rival Go-Ahead, Liberum said.The new enlarged Thameslink franchise, which starts on September 14th, will absorb the current First Capital Connect franchise as well as Southern and parts of Southeastern, which are run by Go-Ahead's joint venture Govia.FirstGroup said in a statement on Friday that the news did not alter its medium term targets and that it was shortlisted for a number of other rail franchises.Liberum has a 'buy' recommendation on FirstGroup with a target price of 155p.Liberum analyst Gerald Khoo said: "The company's obviously going to be disappointed because this was an opportunity they're not going to be able to take advantage of, but there are others still out there."Shares in FirstGroup made up some earlier losses by 10:58 in London, falling 0.2p or 0.15% to 134.6p.PW