Deutsche Bank has repeated its 'sell' recommendation on shares of JD Wetherspoon PLC (LSE:JDW), warning that the recent good run may not last.
While it raised the price target to 490p, that is still well below the current price of 790.5p (up 1.7%).
The combination of sunny weather and share buybacks has boosted the stock's performance, but neither is sustainable.
UK pubs have been big winners from this summer’s long, hot spell.
As a result, Deutsche has nudged up its expectations for this year, now assuming like-for-like sales will rise by 6.5% and pre-tax profits will hit £77m, up from £71m.
The most recent round of share buybacks also lifts expected earnings per share by 10% to nearly 49p.
However, Deutsche sees tougher times ahead. With margins expected to come under pressure and no further buybacks factored in, earnings growth is forecast to slow to just 5% next year.
That leaves the shares trading on more than 15 times expected earnings for 2026, a rating Deutsche says is “hard to justify”.