Talk about damned with faint praise. In a note entitled ‘Not the worst hotel company on the world’, our friends at Peel Hunt reiterated their ‘buy’ recommendation for Whitbread PLC (LSE:WTB) with a £36 share price target.
“Whitbread’s share price has underperformed its peers, which makes no sense to us,” the broker said in a short note to clients.
“We believe that the UK is largely on track to recover from Covid-19.
“Inbound tourism and high-end business travel may be disrupted by the Omicron variant for a while longer, but neither are core to Whitbread, which depends on essential domestic business travel and leisure, both of which are in relatively good health.”
Peel pointed out that Whitbread also has a strong enough balance sheet to ‘seize’ opportunities in the UK and Germany and, crucially, “the freehold asset backing to attract bid interest”.
Food for thought. The shares, off almost 13% in the last month, were changing hands for £28.75, almost flat on the day.
Of the 23 banks and brokers covering Whitbread, 17 are positive on the stock. Only two expect the shares to underperform, while the remainder are neutral on the shares.