Trainline will likely only suffer from strikes in the short term, according to Liberum analysts, who suggest a share target price of 470p for the company, far above its current value of 288p.
Despite downgrading its 2023 earnings forecasts, Liberum said Trainline’s “investment case remains unchanged” and provides an “attractive buying opportunity”.
Granting the train ticket retailer a ‘buy’ rating, brokers anticipate both its 2023 sales and pre-tax earnings to be down 1% and 8% respectively due to train driver strikes but add this represents a “short-term headwind”.
“A resolution to the industrial action will now likely be a catalyst for the shares,” added Liberum, while national rail demand trends suggest continuing trends back to pre-COVID levels.
“Underlying demand remains strong and in fact, there was several days in the second half of the year where usage was over 90% relative to pre-Covid levels,” the investment bank said.
Train drivers across the UK have walked out on 11 days since early December, intensifying a long-standing dispute over pay and conditions that saw 14 strike days between February and November last year.
Liberum cited this increase in action in recent months as the reason for Trainline’s downgrades.
Trainline’s share price was up 1.7% to 288p on Wednesday.