Canaccord sees scope for £500m of share buybacks at Trainline

by | Sep 18, 2023

(Sharecast News) – Analysts at Canaccord Genuity reiterated their ‘buy’ recommendation and 271.0p target price on shares of Trainline due to their “depressed” valuation despite the “materially” improving outlook and potential for share buybacks.
In their opinion, high levels of free cash flow generation meant there was scope for up to approximately £500m of buybacks over five years.

That could suffice to boost earnings per share by 29%.

On their estimates, the company’s EPS was already set to double between fiscal years 2024 and 2028.

But if all the free cash flow generated were funnelled into buybacks then EPS treble over that same timeframe.

In a research note sent to clients they went on to add that ” the majority of the regulatory risk has subsided, with the key risk around commissions removed, while closure of some UK rail ticket offices are a possible tailwind.”

“We believe the threat of a Labour Government and any potential nationalisation of UK rail is a red herring, as c.20% of the UK rail network has already been quasi-nationalised, with no impact on Trainline.”

Related articles

RBC Capital cuts Rentokil price target

RBC Capital cuts Rentokil price target

(Sharecast News) - RBC Capital Markets cut its price target on Rentokil Initial on Wednesday to 575p from 610p as it downgraded forecasts for forex and a greater back-end loading of TMX synergies, but said it believes the long-term story remains intact. The bank said...

Trending stories

Join our mailing list

Subscribe to our mailing list to receive regular updates!