Share Search
Visit the Share Search
You are here:
Peel Hunt starts Whitbread at 'buy'
4th Nov 2019 13:02
(Sharecast News) - Peel Hunt initiated coverage on shares of Premier Inn owner Whitbread at 'buy' with a 4,800p price target on Monday.
It said the current share price is missing the value locked up in the growth strategy and the freehold assets.
The broker said room capacity at Premier Inn will increase 22% based on the committed pipeline and could more than double. Meanwhile, the stock's valuation is underpinned by £5bn of freeholds.
"Management will steadily recycle/return capital as appropriate," it said, adding that a bidder could plan to release capital more quickly.
Peel Hunt forecasts 69% earnings per share growth in FY20-24, driven by 23% capacity growth to 101,000 rooms from 77,000 currently.
"With the hotel cycle turning there is a risk that negative forecast momentum caps the short-term share price upside," it said.
At 1300 GMT, the shares were up 1.1% at 4,171p.
It said the current share price is missing the value locked up in the growth strategy and the freehold assets.
The broker said room capacity at Premier Inn will increase 22% based on the committed pipeline and could more than double. Meanwhile, the stock's valuation is underpinned by £5bn of freeholds.
"Management will steadily recycle/return capital as appropriate," it said, adding that a bidder could plan to release capital more quickly.
Peel Hunt forecasts 69% earnings per share growth in FY20-24, driven by 23% capacity growth to 101,000 rooms from 77,000 currently.
"With the hotel cycle turning there is a risk that negative forecast momentum caps the short-term share price upside," it said.
At 1300 GMT, the shares were up 1.1% at 4,171p.