Broker snap: Investec cuts targets at Stobart

26th Oct 2011 12:55

Investec has cut its target price for FTSE 250 transport logistics group Stobart but kept its buy rating on the stock, saying that despite near-term challenges, the outlook remains encouraging."As a result of the actions we have taken in Transport and Distribution we expect to report further progress in the second half. The Board's outlook for the year is broadly unchanged despite the tough environment", said Stobart's chief executive officer Andrew Tinkler.The broker highlights the board's "broadly unchanged" outlook, saying that the word 'broadly' leaves some ambiguity. As such, Investec feels its prudent to lower its profit forecasts for the current year, meaning that the target price comes down from 176p to 165p."Whilst the road may not always be smooth (as evident from the market challenges that the transport division faced in H1), several key milestones have already been reached, especially in the airport unit. Investors prepared to take the medium-term view on this stock should be well rewarded, we believe, as this value is unlocked," said analyst John Lawson.By 12:36, shares were trading down 6.67% to 117.50p.BC