29th Jun 2021 21:43
(Alliance News) - Moody's Investors Service on Monday said it expects National Express Group PLC to see more earnings pressure from a slowdown in travel.
The ratings agency, however, also noted the coach operator's extensive geographical footprint and the level of support it receives from government.
Moody's assigned a Baa2 long term issuer rating for National Express, with a negative outlook.
"National Express' senior unsecured rating of Baa2 reflects Moody's expectations of continued pressure on the company's revenues, Ebitda and operating profit as a result of reduced travel in the wake of coronavirus, as well as the related overall slowdown in the economic activity," the ratings agency explained.
National Express is constrained by a slump in travel due to Covid-19 lockdowns and its "material leverage", Moody's noted. It also added that there is uncertainty about the pace and timing of a post-virus economic recovery.
On the flip side, the FTSE 250 stock benefits from a "diversified geographic presence". National Express gets "significant" earnings contributions from its UK, Spain and North America arms.
It has also seen a "range of material support from various national and local governments".
National Express shares closed 2.0% higher at 270.20 pence each in London on Tuesday.
By Eric Cunha; [email protected]
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