Credit Suisse is one of several brokers to dip into Whitbread plc (LON:WTB) on Wednesday following interim results yesterday and has chopped down the price target to 4,030p from 4,360p.
It says the firm is taking the right actions in a tough market, namely chasing down efficiencies, investing where needed, and focusing on scale opportunities internationally.
Credit rates shares 'neutral' due to a lengthy list of what it calls "uncertainties", including Airbnb, five years of 6-7% National Living Wage increases, the UK macro landscape post Brexit and Costa's cost investment/margin falls.
It also cuts its estimates for 2018 EPS (earnings per share) by 5% driven by an effective profit warning for Costa.
Yesterday's half year results from the Costa Coffee and premier Inn owner did beat market expectations slightly and the group as a whole posted LFL (like-for-like) sales of 2% - up from 1.8% in the first quarter.
But this is increasingly being driven by room extensions rather than RevPAR (revenues per available room) or like-for-like sales at Costa - hence is likely to be a drag on returns.
Societe Generale today cut the price target on the shares to 4,100p from 4,220.30 and rates the stock a 'hold'.
Scribes at Barclays Capital also covered the stock today and repeated an 'underweight' stance and a 3340p price target.