Proactive Investors reports that Barclays Capital has hiked its valuation on Whitbread (LON:WTB) after posing the question what if the blue chip leisure giant decided to sell Costa Coffee and its hotels real estate. The comments come after news recently suggested that an activist investor that had built up a stake in the blue-chip company was likely to push for a break-up of the Costa Coffee and Premier Inn owner.
Whitbread’s share price has advanced in London in today’s session, having added 0.53 percent to 3,991.00p as of 14:28 GMT. The stock is marginally outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.15 percent higher at 7,659.59 points. The group’s shares have added more than five percent to their value over the past year, as compared with an over seven-percent rise in the Footsie.
Barclays lifts valuation
Barclays, which sees Whitbread as an ‘equal weight,’ lifted its price target on the shares from 3,800p to 3,900p today. Proactive Investors quoted the analysts as saying in a note that under a scenario where the group sells its Costa Coffee and its hotels real estate, they estimate that the company’s ‘sum of the parts’ value could be 4,700p in its upside case, and 5,700p in a blue sky scenario.
The analysts, however, noted that they were not positive enough to upgrade their rating for Whitbread from ‘equal-weight’ to ‘overweight’ due to current trading challenges, as well as the risks of a slowdown in business investment or consumer confidence.
Other analysts on Whitbread
The 22 analysts offering 12-month price targets for Whitbread for the Financial Times have a median target of 4,125.00p on the shares, with a high estimate of 4,900.00p and a low estimate of 3,200.00p. As of December 30, the consensus forecast amongst 28 polled investment analysts covering the blue-chip group advises investors to hold their position in the company.
Whitbread is scheduled to update investors on its performance on January 18.