Panmure Liberum has raised its full-year profit forecast for Premier Inn owner Whitbread PLC (LSE:WTB) due to a return to growth in the UK and improving trading momentum in Germany, but cut forecasts for the following two years.
While last month's interims were in line, cost concerns prevailed.
Having crunched the numbers from the 16 October update, analyst Anna Barnfather upped her pre-tax profit estimate by 2% to £459.9 million for the year to next February.
While UK accommodation sales in the first half were flat and food and beverage revenues declined due to management's 'Accelerated Growth Plan', revenue per available room (revPAR) showed positive momentum.
However, the analyst trimmed her 2027 and 2028 forecasts by 2% and 4% respectively, reflecting higher lease costs following £99 million in sale-and-leaseback transactions.
Net inflation is now expected to land around 2.5%, with increased efficiencies of £65–70 million helping to offset cost pressures.
Panmure also noted the latest estate appraisal raised the value range to £5.5-£6.4 billion, implying a pro forma NAV of around 2,700-3,200p per share.
With the stock trading at nine times full-year earnings on an EV/EBITDA ratio or 12.7 times on a PE basis, Panmure kept its 'buy' rating, with a target price of 3,700p verus the last close at 2,802p.