Proactive Investors - Premier Inn-owner Whitbread PLC (LON:WTB) could grace investors with upgrades in its Thursday, 11 January third-quarter update, according to Peel Hunt (LON:PEEL) analysts.
“As demand remains high and cost inflation is abating, we believe there is scope for upgrades,” analysts wrote in a note.
Given the hotel operator is still making market share gains and has a strong balance sheet to underpin long-term growth plans, Whitbread is well positioned, the bank said.
Peel Hunt sees Whitbread shares topping 4,000p in the coming year, which would take the stock 11% higher than Thursday’s closing price.
This would also see the shares closer to pre-pandemic highs, Peel Hunt acknowledged, with Whitbread having sat just off 4,400p per share in mid-2019 and above 4,550p in 2015.
“The current financial year should be largely in the bag by the time of the trading update,” the bank continued.
Whitbread had guided for between 1,500 and 2,000 new rooms to open in the UK this year, alongside 1,000 to 1,500 in Germany.
Capital expenditure was anticipated from £500 million to £550 million meanwhile, with losses in the German business seen around £30 million to £40 million.
In the UK, a £15 million to £16 million impact on profit before tax was anticipated for every 1% change in accommodation sales, alongside £4 million per percentage change of food and drink sales.
Following the third-quarter update, “market focus should turn to the modest profit growth expected for 2025,” Peel Hunt added.
“Room rates remain lower than 2019 levels in real terms, utility costs are falling, as is inflation in food and beverage costs.”