Broker snap: Go-Ahead fairly valued, according to Nomura

Transport firm Go-Ahead reported steady results on Thursday, according to Nomura, but while the outlook remains solid, the broker believes that the stock is fairly valued and retained its neutral rating.Pre-tax profits and earnings before interest, tax and amortisation (EBITA) for the year ended 2 July came in 1% ahead of Nomura's forecasts, but earnings per share (EPS) was 3% lower due to higher tax and minorities."We believe this rate of growth needs to continue in 2012 for our forecasts to be delivered, with fare increases the key driver," the broker said.The broker expects EBITA to be lower in the current year, due to the non-recurring £13m of contract benefits in UK rail.The target price is cut from 1,520p to 1,500p. "Although there is a slight shift from UK rail to UK bus within our compound valuation, higher net debt is predominately responsible for the reduction in our price target."Shares were 1% lower at 1,481p by 10:52 on Friday.BC