Barclays PLC (LSE:BARC) has increased its share price target for JD Wetherspoon PLC (LSE:JDW) to 900p from 875p, citing several factors that are driving the company’s improved performance.
Key factors include the wallet-friendly pub chain’s increasing market share, gradual expansion of its estate and lower interest costs.
Although Wetherspoon has reduced its pub count from over 900 in the mid 2010s to around 800 today, it is now hoping to shift back into growth mode.
“Our best estimate is that the company has potential for about 1,000 pubs in the UK,” management said in its 2024 annual report.
Wetherspoon’s high level of freehold ownership, which now accounts for 72% of its estate, is also enhancing its financial stability, said Barclays.
The bank highlighted a 14% compound annual growth rate in pre-tax profits from financial 2024 to financial 2027 and reiterated its overweight rating for the stock.
Analysts said: “We believe the path is clear for ongoing market share gains. The company's long-term approach continues to deliver strong results, and we believe the investment case is often overlooked.”
Wetherspoon shares were swapping for 721.5p at the time of writing.