Loungers PLC (AIM:LGRS) is undervalued with the shares lowly rated in comparison to peers, reckons broker Peel Hunt ahead of interim results next Wednesday, 30 November.
The bar owner grew like-for-like sales by 17% in the 24 weeks to 2nd October 2022 in comparison to 2019, which was better than Peel Hunt’s 13% forecast.
Loungers also boasts better growth than its hospitality competitors, said the broker.
Thirty new openings are planned for this fiscal year with the newer venues “trading strongly” said Peel Hunt,
Food and labour costs are challenges, but Peel Hunt believes Loungers can offset these with sturdy growth.
Sales are predicted to rise by 13% in the year to April 2023 against 2019 with the company also benefiting from its utility costs being mostly fixed.
Peel Hunt’s target price is 375p compared to Loungers share price currently of 190p.