Shareholders of City Pub Group PLC (AIM:CPC) should take their profits and invest them into other growth stocks in the hospitality sector, analysts said.
Marston’s PLC (LSE:MARS), Loungers PLC (AIM:LGRS) and The Gym Group PLC (LSE:GYM) are better options and are expected to rally due to being oversold, research by Peel Hunt showed.
City Pubs agreed to be bought for 145p per share by YOUNG & CO 'A' (AIM:YNGA) earlier this month.
Shares are currently trading at 136p so there is still a chance for investors who are late to the party to obtain an upside from the deal.
However, for many long-term holders, the deal is more than a 135% jump compared with the 53p lows experienced back in September 2022.
Another bid is unlikely in the view of Peel Hunt.
Young’s cost of debt will jump an extra 2 percentage points to 7% and pre-tax profits are predicted to rise by £4.5 million immediately and by 8% in 2026.
Shares in Young's are flat on Friday, having opened at 1,085p, with Peel Hunt, which rates the stock a ‘buy’, expecting this to rise to 1,400p.