On Friday, JPMorgan updated its stance on Trainline Plc (LON:TRNT) (TRN:LN) (OTC: TNLIY), raising its price target slightly to GBP3.95 from GBP3.92, while maintaining an Overweight rating on the stock. The adjustment follows changes in the company's business model, specifically regarding the UK Consumer take rate and net ticket sales.
The firm's analyst cited a reduction in maximum fees for ticket refunds as a factor leading to a softer UK Consumer take rate. However, this was balanced by an improved outlook on net ticket sales. As a result, the firm's forecast for the company's adjusted EBITDA for the fiscal year 2025 remains consistent with the previous estimate and aligns with the midpoint of management's guidance, standing at GBP143 million.
The revised earnings per share (EPS) for fiscal year 2025 are expected to be marginally lower, with a 1% decrease attributed to slightly increased net financial expenses. Despite this minor adjustment, the overall financial outlook for Trainline appears stable.
The analyst concluded with the updated December 2025 sum-of-the-parts (SOTP) price target, which was increased from 392p to 395p. This new target reflects the latest estimates and considerations taken into account by JPMorgan in their evaluation of Trainline's stock.
InvestingPro Insights
As Trainline Plc (TRN:LN) (OTC: TNLIY) continues to navigate changes in its business model, real-time data from InvestingPro offers additional context for investors. With a market capitalization of $1.83 billion, Trainline is trading at a P/E ratio of 45.25, which adjusts to 41.17 on a last twelve months basis as of Q4 2024. This valuation is supported by a strong gross profit margin of 76.95%, showcasing the company's ability to maintain profitability.
InvestingPro Tips highlight Trainline's impressive gross profit margins and analysts' predictions that the company will be profitable this year. Additionally, the stock is noted for trading at a low P/E ratio relative to near-term earnings growth, which might interest value-oriented investors. For those evaluating the stock's performance, the company has experienced a 17.98% year-to-date price total return as of day 138 of 2024. These insights suggest that despite short-term market fluctuations, Trainline's fundamentals may offer a stable investment opportunity.
For a more comprehensive analysis, investors can explore additional InvestingPro Tips for Trainline, which detail various aspects of the company's financial health and market performance. To access these insights, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and discover the 11 additional InvestingPro Tips available for Trainline at https://www.investing.com/pro/TNLIY.
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