Stagecoach share price falls after ratings downgrade
THE imminent exit of Stagecoach from rail operation has depressed the group’s shares and market rating. Stagecoach has already handed over East Midlands to Abellio, and its partnership with Virgin Rail Group on the West Coast Main Line ends in December, when FirstGroup and Trenitalia take over. It’s the second time in recent years that Stagecoach has given way to FirstGroup, because Stagecoach had to part with its long-standing South West Trains contract when First and MTR starting running the replacement franchise in August 2017. Apart from Sheffield Supertram, Stagecoach will have no presence in the rail market after December, and its almost complete reliance on the bus industry, which has been declining, caused Moody's Investors Service to downgrade Stagecoach’s rating from Baa3 from Baa2 on Tuesday 29 October, although Moody's kept its outlook on the ratings as ’Stable’. News of the downgrade caused an immediate 1.3 per cent fall in the value of Stagecoach shares to 140.30p on Tuesday, although they staged a slight recovery on Wednesday, to 140.40p.