UBS has maintained its 'neutral' rating for travel group Thomas Cook, saying that a robust top line is still not being reflected in profits.
Revenues in the third quarter (three months to June 30th) was £2,294.8m, down 6% mainly due to a currency headwind, while the group reported an earnings before interest and tax (EBIT) loss of £26.5m, compared with a profit of £20.1m the year before.
UBS says that the operating loss highlights the "continuing struggles" with underlying cost control; the broker expects this to weigh on profits going forward.
"With the new management team now in place, the market is likely to look beyond current trading and focus on the long-term strategy," the broker said.
"On that note, there may be some disappointment that a full review will not be announced until the spring, meaning that visibility on likely restructuring costs, cost control, distribution strategy and long-term financing plans will remain limited."
Nevertheless, UBS's target price has been raised from 15p to 17p.
By 10:30 on Tuesday, shares were down 2.6% at 16.8p.
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