Trainline PLC (LSE:TRN) stormed 14% higher on Friday after the Department for Transport scrapped plans to create a new Great British Railways ticket retailing website and app.
The proposals were originally outlined by the DfT in May 2021, as part of the Williams-Shapps Plan for UK Rail white paper, and sent shares in Trainline plunging at the time.
The Department for Transport said: "As set out in the white paper, we are committed to improving passenger experience on the railways."
"The private sector plays an important role in driving innovation and attracting more customers to the railway."
"As stated in the Bradshaw Address, we are focused on opening up railway data and systems, lowering barriers to entry for independent rail ticket retailers to improve passenger experience."
"We are confirming that we are not pursuing plans to deliver a centralised Great British Railways online rail ticket retailer."
It added: "Train operators will continue to retail to passengers online alongside existing third-party retailers while we develop measures to spur further competition in the online rail ticket retail market to make things better for passengers."
It was intended for the new body aims to sell tickets via a website and app, potentially putting it in competition with Trainline.
JPMorgan said the decision removes a “key overhang to Trainline’s investment case we believe, where the narrative has faced growing investor concern on the risk surrounding the emergence of a new, online retail competitor in the UK, and threat to Trainline’s market share position.”
The broker said while it expects some investor focus to also remain on the emergence of Uber as an online ticket aggregator, “indications continue to suggest little in-roads on traffic share to-date, and we expect investor focus to now turn to Trainline’s strong passenger momentum and improved operational delivery.”
It rates Trainline ‘overweight.’
Elsewhere, the decision prompted analysts at Barclays to upgrade the stock to ‘equal weight’ from ‘underweight’.
It said the decision is "good news for Trainline and a thesis-changer for us."