JOHN LAWSON | INVESTEC
Stagecoach has not earned its reputation as a quality operator with a predictable trading performance by accident. It has taken years of attention to detail and strong management, especially at the local level, and today’s results demonstrate this strength yet again. We keep our add rating.
GERALD KHOO | LIBERUM
Results were marginally ahead of our estimates, with earnings per share helped by a low tax rate we think unlikely to be sustainable. There is some upside risk from rail franchise bids, but not enough on a probability-adjusted basis to warrant a more positive stance. Our recommendation remains hold.
GERT ZONNEVELD | PANMURE GORDON
Headline earnings were in line with our expectations. Looking ahead, UK bus profit growth is likely to be modest, however North America is performing well and earnings should improve further, but rail earnings on the other hand are likely to weaken. We continue to rate Stagecoach a buy.