Broker snap: Whitbread forecasts cut on cautious outlook

4th May 2011 12:57

Credit Suisse keeps its 'outperform' rating on Whitbread, but slashes its target price from 2,230p to 1,992p, after a cautious outlook alongside its full year results.Credit Suisse said that the Costa Coffee and Premier Inn owner reported "solid" figures for the year ended 3 March, but issued cautious comments on current trading which has prompted the broker to revise down its earnings per share (EPS) forecasts by 6% and 9% in 2012 and 2013, respectively."The upshot of softer current trading and more bullish long term growth targets is to raise our top line estimates but lower our EPS forecasts over the next few years," said analyst Tim Ramskill.However, the broker noted that its new target price implies 19% upside potential, as Whitbread has underperformed the FTSE 350 travel and leisure sector by 6% since hitting recent highs in January.---BC