Bus and train operator Stagecoach Group PLC (LON:SGC) rallied as broker Liberum removed its sell rating on the shares.
The broker says challenges to current trading remain, as does the risk of re-regulation in parts of the regional bus industry, but there may be some wriggle-room on the underperforming East Coast rail franchise, which might relieve some of the pressure on the group.
Risks are now evenly balanced at the current valuation, where the dividend yield of 7.7% matched the P/E ratio of 7.7 times.
“Consequently we upgrade our recommendation to ‘hold’ from ‘sell’ with an unchanged target price of 155p.
Shares rose 3% to 164.5p.