SSP Group plc gets target price hike by Citigroup, Liberum as new year to bring

() got its target price hiked by both Citigroup and Liberum as their analysts expect a recovery to begin in the new year.

Citigroup, which maintains a ‘buy’ stance, bumped up the target price to 420p from 290p as the bank expects the Upper Crust owner to deliver profits in the second half of the current financial year.

READ: Upper Crust owner SSP Group expects sales to remain depressed after slumping to full-year loss

The winter will be harder than expected, but profits should recover steadily through financial ears 2022 and 2023, although there may be potential structural headwinds from less business travel and working from home, the US bank’s analysts said.

The operator of food outlets in train stations and airports got a less generous target price boost by Liberum, to 375p from 350p.

The City broker’s analysts noted that the FTSE 250 group can endure extended travel restrictions and rebound rapidly when they lift, after re-negotiating around 70% of its rent contracts and further streamlining the business.

“SSP has demonstrated its excellent cost control and cash management with cash outflows well below expectations in the second half of financial year 2020,” the Liberum analysts commented.

“Liquidity remains healthy and sufficient for a slow and steady recovery ahead, with a return to profitability expected by the end of financial year 2021.”

SSP shares still shed 6% to 294p on Monday morning.