On Monday, Deutsche Bank (ETR:DBKGn) reaffirmed its Buy rating on Whitbread PLC (LON:WTB:LN) (OTC: WTBCF), with a price target of GBP41.50. The endorsement comes ahead of the company's annual general meeting (AGM) and first-quarter update scheduled for June 18. The latest trading data from Whitbread, covering weeks 1-8 of March and April, showed a slight year-over-year decline in total accommodation sales by 1%, with revenue per available room (RevPAR) marginally lower.
The forthcoming 13-week update, which includes additional weeks beyond the initial eight, pertains to the traditionally slower first quarter. Consequently, the bank does not anticipate this update to serve as a major catalyst for the stock. Despite the subdued performance in the early weeks, Whitbread's management has indicated an optimistic outlook. They expect a surge in demand for both business and leisure travel in the upcoming weeks, supported by a forward-booked revenue position that is currently surpassing last year's figures.
This positive forecast on future bookings aligns with sentiments expressed by competitor Travelodge in its own first-quarter update. Travelodge's commentary, mirroring that of Whitbread's management, suggests a shared industry expectation of increased travel activity in the near term. Whitbread's upcoming AGM and Q1 report will provide a clearer picture of the company's performance and its alignment with these industry trends.
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