Go-Ahead Group PLC (LON:GOG) shares fell on Wednesday as Liberum Capital downgraded its rating for the transport operator to ‘hold’ from ‘buy’ due to the lack of growth in its Regional Bus business, although it increased its price target to 1,890p from 1,810p.
In a note to clients, analysts at Liberum said the target hike came after it increased short-term forecasts to reflect the better performance at the Southeastern rail franchise, flagged in Go-Ahead's recent trading update, but added that this is increasingly offset by more cautious assumptions for Regional Bus.
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They said: “Our previous optimism appears misplaced, with few signs of a revenue recovery.”
The analysts added: “Although the Regional Bus performance is disappointing, we believe the underlying performance may be even worse, given a weak comparative.”
In morning trading, Go-Ahead shares fell 3.2% to 1,780.0p.