Broker snap: Whitbread in line, but Panmure and Investec stay cautious

11th Dec 2012 10:36

Costa and Premier Inn owner Whitbread's third-quarter trading statement received a warm welcome from the market on Tuesday morning, but analysts have decided to stay cautious about the stock despite the in-line results.Total sales rose by 14.4% in the 13 weeks to November 29th, as a strong performance from Costa (+25.5%) and Premier Inn (+12.6%) offset a more subdued showing by the Restaurants division (+4.1%). On a LFL basis, total sales were up 3.3% year-on-year, down from the 4.3% growth seen in the first half. Whitbread had guided to a "moderation" in LFL sales growth in its interim results statement.Panmure Gordon said that company is on track to deliver full-year figures in line with expectations and no changes to consensus forecasts are expected. "Costa's performance is likely to have received a boost from the negative publicity around Starbucks' tax affairs although it has consistently reported this level of LFL sales growth over the past 18 months," the broker said.However, with the stock trading at 15.4 times full-year earnings (on consensus forecasts), Panmure reiterated its 'hold' recommendation and 1,994p target price, saying that it remains "cautious on current trading and the increasing competitive environment for budget hotels".Investec chose to take a more negative stance than Panmure though, maintaining its 'sell' rating and 1,650p target for the shares.Analyst James Hollins said: "There is no change to our forecasts, although there is also no change to our view that the shares are pricing in an outlook for substantial group returns improvements that, Costa-aside, we do not think exists."Elsewhere on Tuesday morning: analysts at Numis raised their price target for the stock from 2,650p to 2,700p and kept an 'add' stance; Credit Suisse reiterated its 'outperform' rating and 2,760p target price; Oriel Securities maintained a 'hold' recommendation; while Shore Capital and Liberum Capital retained their 'buy'.BC