Toby Carvery owner Mitchells & Butlers PLC (LSE:MAB) has been the focus of optimism from Deutsche Bank analysts, who lifted the pub chain’s share price target on the back of recovering demand.
Bumping M&B’s share price up from 240p to 275p, a prospective rise of 28% from Wednesday’s close, Deutsche pointed to recovering demand for UK pubs and restaurants.
This recovery has prompted the likes of M&B and JD Wetherspoon PLC (LSE:JDW) to rise by 64% and 68% respectively in the past six months, analysts noted.
Wetherspoons hinted full-year sales could reach record figures in a May trading update, while M&B said costs were now improving amid inflationary squeezes, marking positive news to the cost-of-living hit sector.
However, the bank did question whether the sector’s recovery had reached its end, with shares in the pair seemingly having peaked in recent weeks.
Pub chain Marston’s PLC (LSE:MARS) has fallen over 20% in the past six months meanwhile, Deutsche pointed out, with high inflation and further prospective interest rate hikes set to keep causing pressure.
Despite questioning whether the hospitality sector’s recovery could be over, Deutsche kept an optimistic stance and reiterated a ‘buy rating’ for Mitchells & Butlers.