Mitchells & Butlers PLC (LSE:MAB) shares gained ground on Tuesday after Deutsche Bank upgraded the pub group from Hold to Buy and raised its price target from 300p to 325p, citing valuation support and improved fundamentals.
Analyst Tim Barrett said a rotation away from artificial intelligence-focused stocks and renewed investor interest in asset-backed companies had created “certain buying opportunities.”
He noted that Mitchells & Butlers, trading at a roughly 50% discount to net asset value, was one of the most attractively priced operators in the sector.
“Cost inflation has now peaked, and demand growth remains solid, particularly around key events such as Christmas,” Barrett wrote. He added that quality pub operators like Fullers and M&B offer compelling value, underpinned by tangible assets and steady trading performance.
Deutsche Bank reiterated its 'buy' rating on Fuller, Smith & Turner and flagged concerns about the outlook for other leisure names.
It maintained 'sell' ratings on Greggs and JD Wetherspoon, citing pressure on margins and, in Greggs' case, potential brand overstretch.
At midday, the stock was up 3% at 282.5p.