Whitbread PLC (LSE:WTB) and Mitchells & Butlers PLC (LSE:MAB) have been highlighted as top picks in what Liberum analysts describe as a widely-undervalued leisure sector.
“The sector outlook is more stable than it has been for several years, which we believe should prompt a rerating in 2024,” Liberum said in a note.
“Consumer confidence is improving, and earnings expectations are rising.”
Those with the strongest consumer proposition and pricing power are perhaps most prone to share price rises, the investment bank added.
These include Premier Inn-owner Whitbread and Mitchells & Butlers, alongside the likes of Loungers PLC (AIM:LGRS), The Gym Group PLC (LSE:GYM), Hostelworld (LSE:HSW) and SSP Group PLC (LSE:SSPG), it said.
Granting each ‘buy’ ratings, Liberum added recent updates had pointed to strong trading momentum heading into the new year, particularly across pub and travel firms.
“Although not stellar, we expect consumers will continue to prioritise spending on experiences above other discretionary spending categories,” analysts said.