Thomas Cook Share Discussion Threads

[sunnybeachboy] 31/1/2019 16:41

Close 34.66p

[r9505571] 31/1/2019 12:06

We stay on the sidelines, noting the very wide risk-reward skew (bull +255%, bear -73%)What does this mean?

[knowing] 31/1/2019 10:10

Thomas Cook and TUI losing market share to new entrants, Morgan Stanley survey suggests
12:28 30 Jan 2019
Morgan Stanely expects Thomas Cook and TUI to post wider losses for the first quarter
Holiday
Most holidaymakers planning an overseas trip this year plan to book a package
Thomas Cook Group PLC (LON:TCG) remains the most popular tour operator and TUI AG (TUI) is in second place but both seem to be losing market share to newer entrants, a Morgan Stanley survey revealed.

In the survey of UK holidaymakers, some 36% of respondents said they were likely to book with Thomas Cook, compared to 43% in last year’s study.

READ: Thomas Cook confirms 'disappointing' full year earnings and turnaround plan
For TUI, 35% of survey respondents said they would book a holiday through the company, down from 38% last year.

“This is the first drop for both companies in four years, and is likely due to newer entrants (On the Beach PLC (LON:OTB), Jet2), and slower capacity growth than the competition,” Morgan Stanley said.

“Including subsidiary brands, TUI and First Choice combined have lost more market share (54% vs. 63% last year) than Thomas Cook and Airtours (45% vs.50% last year).”

Morgan Stanley reinstates target price for Thomas Cook
Morgan Stanley reinstated a target price of 60p on Thomas Cook, representing a 64% upside, saying the company seems to have navigated its way past its cash low point and extended covenants with its banks. The investment bank has an ‘equal weight’ rating on the stock.

Thomas Cook fell out of the FTSE 250 in December after a sharp fall in the market value of the firm amid worries about its debt mountain. Last year, net debt ballooned to £389mln from £40mln a year ago but the company insisted its covenants were compliant and it had headroom for future covenant tests.

Free cash outflow was £148mln last year, compared to a free cash inflow of £146mln in 2017.

Thomas Cook also posted a 23% drop in full-year profits and suspended its dividend after a prolonged summer heatwave and subdued consumer spending meant people were less inclined to book overseas holidays.

“The company is de-risking through capacity cuts and cost savings, but reductions in third-party commissions and marketing are affecting revenue,” Morgan Stanley said.

“The 2019 price/earnings of 4.3x is low, but free cash flow is weak due to exceptional costs, there is low visibility on its covenants and liquidity, and working capital is a risk.

“We stay on the sidelines, noting the very wide risk-reward skew (bull +255%, bear -73%).”

Thomas Cook reports its first-quarter results on February 7 and Morgan Stanley predicts a wider loss of £52mln from last year, due to a slow start to winter trading.

TUI cheap but first quarter 'will be poor'
On TUI, Morgan Stanley maintained an ‘equal weight’ rating but lowered its target price to 1,500p from 1,600p.

The bank said TUI’s shares have derated over the past year due to tour operating and UK concerns.

“TUI looks cheap, but Q1 will be poor, so we stay neutral,” Morgan Stanley said. The bank estimates TUI will report a first quarter loss of €47mln, compared to €25mln a year ago. TUI publishes the results on February 12.

TUI last month reported a 4.1% rise in 2018 earnings (EBITA) and maintained its guidance for the next three years.

READ: TUI AG prepares for potential hard Brexit as it posts 2018 earnings growth
For the 2019 financial year, it estimates underlying EBITA will rise by at least 10%.

“We think TUI can deliver 10% EBITA growth again in FY19 given easy tour operating comparables (and despite some one-off gains), and we note the comeback of Turkey in our survey is positive for tour operating margins and its "Other" Hotels line (loss-making in FY18),” Morgan Stanley said.

TUI has said it is concerned about losing flying rights if the UK exits the European Union without a deal.

Brexit concerns overdone, survey shows
But Morgan Stanley’s survey showed people still expect to travel abroad using package holidays this year.

Of the 73% who plan to travel abroad in the next year, 61% of respondents expect to take a package holiday, up from 59% last year. The survey also showed that 54% of these people are likely to book earlier than last year, up from 53% last year. For the rest of the survey participants who plan to stay at home, just 2% mention Brexit as the main reason for not going abroad.

[1224saj] 30/1/2019 17:03

Funny that, MS quote both TC and Tui and only TC drops 3%

[blueteam] 30/1/2019 10:36

These broker forecast are always self motivated and it looks like then Morgan Stanley are a buyer and expect an upward rise now towards 60P. lol

[knowing] 30/1/2019 10:32

Broker Forecast - Morgan Stanley issues a broker note on Thomas Cook Group PLC
By BFN News | 08:20 AM | Wednesday 30 January, 2019
Factsheet Thomas Cook Grp PLC OrdEUR0.10 (TCG)

Morgan Stanley today downgrades its investment rating on Thomas Cook Group PLC (LON:TCG) to equal weight (from overweight) and cut its price target to 60p (from 155p). Story provided by StockMarketWire.com Broker Forecasts data provided by www.sharesmagazine.co.uk

[castleford tiger] 30/1/2019 09:17

broker downgrade to 60p

Still gives 50% upside if it gets there

tiger

[zim art] 29/1/2019 19:38

Guo Guangchang have upped their stake by 1% - now hold over 15% - news released today. Also noticed there is a short position of 0.5% from a week ago - not sure I would want to be short

[castleford tiger] 29/1/2019 17:54

Certainly buying plenty.

tiger

[philmac56] 29/1/2019 14:03

Xc1...yep, like the share price looks excited!! Lol

[xc1] 29/1/2019 13:32

I think a partnership rather than a buy out.However, anything can happen. Exciting times.

[r9505571] 29/1/2019 13:29

What % are you obliged to make a formal offer?

[blueteam] 29/1/2019 12:52

Yes, must now be on bid alert for 75p - 80p takeout, BUT would not be good for the long term holders but for new or average down holders would be great.

[xc1] 29/1/2019 12:43

Fosun CEO loading up. Now over 15%.

[snorkelparker] 28/1/2019 14:16

Ny boy, what are you expecting Fosun to do ?

[ny boy] 28/1/2019 09:38

Best ignore the noise, stay focused on the Fosun prize ahead

Pulled back for more fuel to mount a challenge for the 39p break through this quarter.

[once bitten1] 26/1/2019 15:53

How naive are you ??Every share is subject to Pump and Dump it's just the degree of influence that varies...

[xc1] 25/1/2019 12:54

Fosun " everyday is a Foliday"https://skift.com/2019/01/24/fosun-anchors-new-china-resorts-with-club-med-and-thomas-cook-brands/

[knowing] 25/1/2019 10:42

https://www.theguardian.com/world/2019/jan/17/portugal-plans-special-lanes-for-britons-in-its-airports-after-brexit

[ny boy] 24/1/2019 15:38

Hardly free fall lol

I added more, building a stake over 50,000 shares, lots of dip buying underway on many stocks, I have been accumulating (IDP) as my next recovery play.

[r9505571] 24/1/2019 15:27

Big sell went through there! Free fall for a bit!