Thomas Cook has seen its shares plummet by a further 40% after banking analysts cut their target price on the holiday firm’s stock to zero.

Citigroup downgraded its rating to “sell” in the wake of the latest profit warning by the world’s oldest travel company, which had already led to a fall in its shares of almost 15%.

It came a day after Thomas Cook reported a half-year loss of £1.46bn as it counted the cost of Brexit uncertainty causing UK consumers to delay holiday plans.

The company also said its full year profits would come under pressure – the third such warning in less than a year.

Thomas Cook said it was cutting 150 jobs at its head office in Peterborough as it continues to reduce costs.

Citi said the latest profit update might “unsettle consumers and drive further weakness in bookings”.

“Debt markets are clearly highlighting the risk of financial distress and a debt for equity swap or substantial rights issue are both probable outcomes in our view,” Citi analysts said in a note.

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Thomas Cook has already closed 21 stores with the loss of 300 jobs, put up its airline business for sale – confirming that it had received “multiple bids” for the business – and reduced capacity as it faces up to the challenges facing the sector.

It has also now agreed a new £300m banking facility with lenders to help see it through this winter.

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