Whitbread share price: Analysts point to waning growth trajectory

Hargreaves Lansdown says investors intrigued by break-up prospects

Whitbread share price: Analysts point to waning growth trajectory

Hargreaves Lansdown argues that consumer confidence has dented the trajectory at Costa Coffee and Premier Inn owner Whitbread (LON:WTB), Citywire reports. The comments came after the company updated investors on its performance yesterday, revealing weak like-for-like sales growth in the UK in the third quarter of its financial year due to tough market conditions.

Whitbread’s share price nevertheless rose in the previous session, adding 3.45 percent to close at 3,988.00p and outperforming the broader UK market, with the benchmark FTSE 100 index closing in negative territory. The blue-chip group’s shares nevertheless remain more than three percent lower over the past year.

Waning growth trajectory

Citywire quoted Hargreaves Lansdown’s analyst Laith Khalaf as commenting yesterday that weak consumer confidence in the UK had “lessened Whitbread’s growth trajectory, so investors will be pleased to see a step up in Premier Inn’s expansion into Germany, and Costa’s further investment into the potentially lucrative Chinese market”.

The comments came as the Costa Coffee and Premier Inn owner posted 0.3-percent like-for-like Q3 sales growth in the UK, reflecting recent tougher market conditions. Investors, however, instead focused on reports that an activist investor is pushing the blue-chip group to consider splitting the Costa Coffee chain from its hotels and restaurant businesses. Khalaf noted that the response “suggests the market quite likes the idea of a bit of a change”.

“After all, there’s not a great deal of common ground between hotels and coffee shops,” he added.

Other analysts on Whitbread

Liberum Capital reiterated its ‘hold’ rating on the FTSE 100 company today, valuing the shares at 4,150p, while Shore Capital continues to see the group as a ‘buy,’ without specifying a price target on the shares. According to MarketBeat, Whitbread currently has a consensus ‘hold’ rating and an average price target of 4,073.27p.

As of 07:58 GMT, Friday, 19 January, Whitbread plc share price is 3,987.00p.

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