Proactive Investors - Whitbread PLC (LON:WTB), owner of Premier Inn, could see both its top-line revenues and bottom-line earnings soar in the upcoming financial year, according to JP Morgan.
The US bank upgraded its underlying earnings estimates for the hospitality group by 2.4% to £968mln for the 2024 financial year.
Revenue per average room (RevPAR), a key hotel benchmark, is expected to reach £2.8bln, 12% ahead of Bloomberg consensus, JP Morgan added.
The Dunstable-based company has had a “very strong year” and is currently benefiting from “solid trading momentum”, especially in the UK economy segment, said the investment bank.
“In fact, we think the story has a lot more legs,” said the world’s largest bank.
Whitbread has room to increase UK guidance further and the ability to introduce a share buyback scheme in the second half of the financial year, JP Morgan revealed.
The lender also believes Whitbread, which owns brands like Beefeater and Brewers Fayre, could push its food and beverage operations further with a strategic review of the division.
Finally, there are options for growth in Germany.
In Whitbread’s most recent update, it had 51 hotels in Germany and revenues in the European country have jumped by 234% in the last year.
JP Morgan (NYSE:JPM) rates the hotelier ‘overweight’ and expects the share price to reach 4,300p by December 2024.
This target price represents around a 30% upside to the 3310p price of Whitbread on Tuesday.