Peel Hunt initiates Stagecoach at 'hold'

(Sharecast News) - Peel Hunt initiated coverage on shares of transport operator Stagecoach at 'hold' with a 64p price target.
The broker noted that Stagecoach has the largest share of the UK's regional bus market.

"Whilst these services are critical to the UK economy, and support has been provided by national and local government, we remain wary, as 63% of pre-Covid-19 regional revenues was directly exposed to commercial passenger volumes, meaning the majority of revenue would be at risk if demand does not recover quickly," it said.

Peel said it believes there is a lower risk of franchising being introduced but is concerned bid costs may rise for new contracts.

At 1025 BST, the shares were up 6% at 59.25p.