Market Report: Berenberg believes Thomas Cook will hit all its targets
Friday 06 June 2014
Thomas Cook is on a journey to a better place and Berenberg wants to go along for the ride.
The German investment bank kicked-off coverage of the travel agent with a buy rating. It has surged in the two years since Harriet Green kick-started a turnaround, but Berenberg believes a recent slump in price means there’s still an upside.
Given the sunny outlook for the economy, the bank believes Thomas Cook will hit all its targets – an outcome not priced in. Thomas Cook crept up 1.6p to 157.3p.
Solid US job numbers managed to breathe life into the tepid Footsie – despite weak volumes, the index climbed 44.72 points to 6,858.21 after a week of decline.
The knock-on effect of the jobs recovery in America was the slump in the price of gold, a safe haven when times are tough. Producers of the stuff lost out: Fresnillo dropped 16.5p to 775.5p, Randgold Resources slid 51p to 4,356p and African Barrick Gold fell 3.7p to 215.8p.
Consumer goods were also out of favour. Mario Draghi’s “big bazooka” measures to save the euro caused sterling to surge against the currency. That means it will be more expensive for companies to sell their wares on the continent. Lynx and Ben & Jerry’s maker Unilever lost 44p to 2,632p; Johnnie Walker and Guinness-maker Diageo shed 30p to 1,875p and Durex owner Reckitt Benckiser was 45p lower at 5,070p.
Online retailers made a recovery after a bloodbath earlier in the week. Asos jumped 230p to 3,350p, helped by an upgrade from UBS, while rival Boohoo clambered up 1.25p to 46.25p on a recommendation from Oriel Securities.
National Accident Helpline climbed 8.5p to 206.5p, as the legal specialist surpassed its first day’s closing price for the first time since listing just over a week ago.
Engineering firm Redhall tumbled 10.5p to 28.5p on AIM, as it admitted profits this year would be below expectations and boss Richard Shuttleworth resigned.
Paternoster Resources slid down 0.05p to 0.27p after falling to a pre-tax loss of £33,148.
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