Sentiment hit as Firstgroup loses Scotrail, but analysts stay upbeat

8th Oct 2014 10:58

Firstgroup's share price was dented on Wednesday by the transport group's failure to secure the Scotrail franchise for next year, though analysts mostly retained their positive stance on the stock despite the negative news.Investec kept a 'buy' rating but placed its 151p target price for the shares under review, highlighting "another disappointing day" for the company."Life never seems to get any easier at Firstgroup," the broker said.Investec said that the financial impact of the contract loss would not be too large - a working capital outflow of £70m is to be taken in the second half - "but this does not help sentiment".Similarly, analysts at Liberum said they had a 3p per share value priced into their forecasts for the option value of the contract bid, so the loss was "not a material impact".The broker reiterated its 'buy' recommendation and 155p target price for Firstgroup's shares, but admitted that the Scotrail loss would be "negative for sentiment".JPMorgan Cazenove also repeated its 'overweight' position on the stock with a 156p target, while Panmure Gordon restated its 'hold' rating and 140p target.The stock was down 3.7% at 110.9p by 11:20.