Citi, the investment bank, forecasts adjusted pre-tax profit for Whitbread PLC (LSE:WTB)'s first half of the financial year ending February at 4.2% above market consensus, driven by slightly higher revenue and net cost phasing between the UK and Germany.
The bank forecasts UK RevPAR growth of 2% for the financial year ending February 2027, ahead of the 1.5% consensus estimate, with second-quarter data pointing to continued positive momentum.
Citi noted that Premier Inn had retained its RevPAR premium and slightly outgrown Travelodge despite the rival's room refurbishment programme.
The bank said first-half consensus profit estimates had edged higher over the past month alongside improving RevPAR data, but argued further upside potential remained.
On valuation, Citi said Whitbread's shares looked attractive, with the stock's second-year price-to-earnings ratio having moved to a 0.4 percentage point discount to the FTSE 250 index, against a historical premium of around one percentage point.
The shares have also lagged inflation-adjusted UK RevPAR growth since the Iran conflict, Citi added.
The bank flagged one risk to watch: the return of hotels previously used for asylum-seeker accommodation to public use could accelerate UK hotel supply growth in the second half of the financial year.
