Berenberg Bank has demonstrated continued confidence in the transport group, FirstGroup (LON:FGP), by raising its target price from 170.0p to 185.0p today. This bullish stance follows a depot visit and is driven by robust demand for FirstRail, the company's significant strides towards electrification, and a notable 43% increase in FirstGroup shares year-to-date.
The bank has upgraded its profit expectations for FirstGroup, citing growth in open access and lucrative returns from fee-based contracts as key contributing factors. Berenberg further underscored the company's investment potential, highlighting its strong balance sheet optionality.
In addition to these positive trends, FirstGroup's electrification efforts were recognized as a significant revenue source. This led Berenberg to adjust its operating and attributable profit forecasts upward for the transport group. Despite the significant increase in FirstGroup shares this year, Berenberg emphasized that there remains considerable value due to these positive trends and robust financial position.
In contrast to Berenberg's optimistic outlook on FirstGroup, Canaccord Genuity downgraded The Mission Group to 'speculative buy', reducing its target price from 61.0p to 55.0p. This decision was triggered by a dip in demand and a sudden reduction in client spend, leading to a more cautious outlook and an operational review.
Meanwhile, Exane BNP Paribas (OTC:BNPQY) named Flutter Entertainment as its top pick in the gaming sector ahead of the Q3 earnings season. Despite profit warnings and market volatility, they believe that Flutter has continued to gain market share, especially in online sports betting.
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