Shares in Thomas Cook jumped by more than 30% – or 4p to 17p – yesterday after Investec Securities said investors were underestimating its chances of survival.
The imminent arrival of a new chief executive and a supportive banking syndicate mean Cook can deliver on its turnaround programme and find enough asset sales to address concerns over its long-term existence, Investec said.
The company is looking for a new chief to replace Manny Fontenla-Novoa, who resigned last August, and analysts said an appointment could spark a major rebound.
Investec highlighted the support that Cook has been receiving from its banks, and argued that it has the ability to generate enough cash to pay off its debts and restart its dividend.
The group has been looking at asset sales such as hotels in Spain and a shareholding in an Indian foreign exchange business. The latest speculation centres on whether it may dispose of its Condor charter airline in Germany.
Despite the improved outlook for Cook Investec analysts had a downbeat view for the overall sector, saying that not only were cash-strapped consumers currently less likely to take an annual foreign holiday but that those who did were increasingly constructing their own trips.
Tui Travel shares dropped by 5.3p to 202p in response to a “sell” recommendation.