Canaccord Genuity remains upbeat on Whitbread (LON:WTB) after the group unveiled plans to demerge its Costa Coffee unit. WebFG News reports that the analysts argue that there are no synergies to be found from keeping the FTSE 100 company’s businesses together.
Whitbread’s share price has jumped in London in today’s session, having added 1.22 percent to 4,228.00p as of 14:42 BST. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.12 percent higher at 7,388.46 points.
Canaccord upbeat on Whitbread
Canaccord Genuity reiterated its ‘buy’ rating on Whitbread yesterday, with a price target of 4,500p on the shares. WebFG News quoted the analysts as saying that there were no synergies to be found from keeping the group’s Premier Inn and Costa Coffee businesses together. The comments came after the FTSE 100 company unveiled plans to spin off its coffee business, arguing that the move would provide shareholders with investment in two distinct businesses.
“We already expect the management teams of IHG, Marriott, and Accor to be doing their homework,” the analysts noted, adding that until the demerger was concluded, Whitbread had the “opportunity to turn interesting international bridgeheads into material growth opportunities for both Premier Inn and Costa” in reference to Germany and China, respectively.
Other analysts on group
Credit Suisse, which has an ‘outperform’ rating on Whitbread, boosted its price target on the shares from 4,900p to 4,950p today, while Kepler Capital Markets, which sees the company as a ‘hold,’ hiked its valuation on the Premier Inn and Costa Coffee owner from 3,500p to 4,200p. According to MarketBeat, the FTSE 100 group currently has a consensus ‘hold’ rating and an average price target of 4,283.55p.