Canaccord Genuity starts Trainline at 'buy'

(Sharecast News) - Canaccord Genuity initiated coverage of Trainline on Tuesday with a 'buy' rating and 371p price target as it argued it's potentially a 10-15% organic growth business and said the valuation is "very low valuation for such a high-growth and quality platform player". It said Trainline is a high-growth platform business that it believes investors have largely forgotten about.

"The risks around macro factors, regulation and competition are limited, in our view.

"We believe Trainline is now about to see a re-acceleration in growth to a compound 10-15% per annum., with increasing margins and a potential cash return story developing."

The broker said that trading on a FY24E EV/EBITDA ratio of circa 11x and c.6% free cash flow yield, it expects a re-rating to occur.

"At the current valuation, the UK SaaS and International B2C businesses appear to be included for free," it said.

At 1125 BST, the shares were up 2.3% at 241.80p.