Trainline could soon find itself on the radar of private equity investors, according to analysts at Berenberg, who believe the market has priced the company too conservatively in response to perceived regulatory headwinds in the UK rail sector.

Despite a 40% decline in share price year-to-date – including a 7% drop following its recent earnings update – Berenberg maintains Trainline as one of its top picks in the European software and computing sector. The analysts argue that fears surrounding increased UK regulation and competition are “overdone,” and do not reflect the company’s underlying performance.

Following its recent de-rating, Trainline is now trading at just 12x 2026 forecast earnings. At this valuation, Berenberg believes the business could attract attention from private equity buyers. Even absent a buyout, the analysts suggest the current share price represents “an attractive risk/reward” and expect continued operational strength to support a future re-rating.

Financial highlights include a 13% year-on-year increase in UK consumer ticket sales and a return to profitability for the International Consumer segment – deemed a “key milestone” for the company. For the current fiscal year, Berenberg expects adjusted EBITDA growth of 6–9% and adjusted EPS growth of 15%.

Since September 2023, Trainline has returned £154m to shareholders via buybacks, with a further £75m still authorised. Berenberg sees scope for additional capital returns, forecasting £81m in free cash flow for the current year.

Source: Proactive Investors 

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