Broker snap: Peel Hunt hikes target for Whitbread

26th Apr 2012 11:48

Peel Hunt has reiterated its buy recommendation for coffee shop, restaurant and hotel owner Whitbread following the group's full-year results.Total revenue for the financial year ending on March 1st was up 11.2% to £1,778.0m from £1,599.7m the year before, ahead of expectations of a figure of £1,765.1m. Pre-tax profit of £320.1m, up 11% on the prior year, was slightly ahead of the consensus forecast range of £305-320m.Peel Hunt says that current trading is also better-than-expected with positive performance in Hotels as well as restaurants.The broker notes that following speculation on the potential de-merger of Costa (on the announcement of the coming resignation of the divisoin's Managing Director John Derkach and his replacement with Finance Director Chris Rogers), "we expect no specific news today"."The move seemed to heighten the possibility that the demerger will eventually take place. The shares have accelerated on this sentiment but this theme is likely to become stale," said analyst Paul Hickman."Our raised target price of 2,030p [from 1,860p previously] assumes that the existing consolidation discount to peer value comes out sooner rather than later.Shares were trading 3.92% higher at 1,880p just before midday.BC