On the Beach downgraded to ‘neutral’ by Citi as trading forecast to be subdued until 2022

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On the Beach Group PLC (LON:OTB) was downgraded to ‘neutral’ from ‘buy’ by Citigroup as the travel industry remains in an uncertain position despite the recent COVID-19 vaccine news.

The online travel agent saw its share price shoot up by 29% after Pfizer announced its jab was effective in 90% of cases in late-stage trials.

READ: On the Beach awaits cash from airlines as 90% of holidays cancelled

The stock exceeded Citi’s target price of 340p, so analysts raised it to 370p.

However, there is still some lack of visibility and the investment bank is assuming some normalisation of trading only in the year to September 2022.

“We expect financial year 2021 to be a transition year, with winter trading currently challenged, potential vaccine rollout through the year and uncertainty around population uptake and immunity longevity,” analysts commented.

“We therefore assume 2021 net revenue at 65% of 2019 level.”

Shares slipped 8% to 316.46p on Tuesday late morning.

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