Proactive Investors - Whitbread PLC (LON:WTB) attracted positive comments from Citi and Barclays (LON:BARC), helping push shares 1.2% higher at 3,673p, taking its increase year-to-date to 37%.
Citi increased its price target to 4,500p from 4,000p after hosting Whitbread's head of investor relations at its growth conference.
The bank noted even though September's RevPAR has started sequentially weaker for most regions, UK economic trends remain the strongest.
As a result, it has taken a more optimistic view for the rest of the financial year 2024 and raised financial year 24/25/26 adjusted Ebit estimates by 10%/8%/4%, which drives the new 4,500p price target.
Whitbread sees demand outlook in the UK remaining robust, despite the weak macroeconomic environment, while revPAR strength is seen as a consequence of structural supply dynamics as independents have exited the market, Citi said.
The owner of Premier Inn pointed to supply constraints continuing given rising interest rates.
Barclays was also upbeat on Whitbread which is its preferred pick in leisure.
“We believe UK RevPAR strength is more sustainable than the market expects when we reflect on: 1) optimistic spend intentions from our latest consumer survey, 2) constrained supply, 3) UK pricing still 13% below 2007 peak in real terms, and 4) PI's own pricing opportunity,” it said.
The bank rates Whitbread ‘overweight.’