Broker snap: UBS downgrades Whitbread after investor day

5th Jul 2013 11:49

UBS has cut its recommendation for restaurant and hotel firm Whitbread from 'buy' to 'neutral' following the company's investor day, citing insufficient share price upside."While we view the new brand and international expansion plans positively, we do not think these initiatives change the near term outlook or forecasts," the broker said.As for Whitbread's announcement of a new compact concept for its hotels, 'hub by Premier Inn', UBS said it views this positively although it's too early to estimate the financial impact given that the first hotel doesn't open until next year.Meanwhile, the firm's international hotel plans still need to be delivered, the broker said. There are 1,300 international rooms currently, yet Whitbread plans to have 10,000 by 2018, on top of the 75,000 target for the UK. "However, past progress on the international front has been mixed and we remain cautious on the international hotel development."The broker has raised its target price from 2,900p to 3,150p, but downgraded the stock's rating, given that its valuation is at the top end of the historic range.The stock was down 2.72% at 3,108p by 11:56 on Friday.BC