UK-based leisure brands Compass Group PLC (LSE:CPG) and Whitbread PLC (LSE:WTB) could do well if the losses from the pandemic prove less than feared, Barclays has suggested in a note.
The broker forecasts Compass and Whitbread- as well as IHG Group - will achieve 2023 revenues higher than those achieved in 2019, as it reckons the shift to working-from-home has been overstated.
Barclays forecast for Compass' earnings per share (EPS) in 2024 is 9% above consensus, while Whitbread remains an attractive brand says the broker.
The bullishness comes following research from Barclays that suggests the assumed drop off in days in the office and business trips is likely to be lower than the 20-30% previously expected.
The survey carried out by the broker surveys suggest around 1% lower permanent revenue headwind than is currently expected for both caterers and hotels, which at the margin would be substantial for the leisure groups.
Expectations of permanent structural changes as a result of the pandemic have become tempered as restrictions have eased, with a November report by the Global Business Travel Association (GBTA) suggesting a full recovery by 2024.