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Broker snap: Whitbread builds momentum
Wed, 08 Feb, 2012
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Broker snap: Whitbread builds momentum
Thu, 4 Mar 2010, 12:50:00
Andy Harrison, chief executive officer (CEO) of <b>easyJet</b>, should inherit a company in robust shape when he takes over as CEO of restaurants and hotels group <b>Whitbread</b> in late November. Charles Stanley approves of the appointment and thinks his 'experience of yield management and international markets will be useful for Whitbread.' The broker has left its earnings forecasts unchanged following Whitbread's trading update on Thursday 'although we believe forecast risk remains on the upside.' 'Going forward, we expect the trading environment to gradually improve through 2010 and into 2011, as the UK economy slowly recovers,' reckons Charles Stanley analyst Sam Hart. 'Longer term, we believe Premier Inn is well placed to benefit from structural growth in the UK budget hotel sector. Growth prospects for Costa also appear good, with significant potential for further growth in the number of stores both in the UK and overseas,' Hart added. The broker rates the shares as no more than a 'hold' at this price but would be inclined to add shares if the price weakens. KBC Peel Hunt is more bullish, rating the shares a 'buy'. 'Positive momentum in Q4 [fourth quarter] was no surprise and we expect this to continue through 2010, despite the tough backdrop. After significant outperformance there may be a pause for breath in the short term but Whitbread remains a core investment in the sector,' according to KBC analyst Nick Batram.
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