Bearish investors have increased their wagers against Whitbread (LON:WTB) since the sale of the group’s Costa Coffee chain to The Coca-Cola Company, Bloomberg has reported. The news comes after the FTSE 100 group’s investors overwhelmingly backed the deal last week.
Whitbread’s share price fell in the previous session, giving up 1.30 percent to 4,567.00p and underperforming the broader UK market, with the benchmark FTSE 100 index adding 4.80 points to close 0.07 percent higher at 7,054.60, finding support in a weaker pound. The group’s shares have added more than 15 percent to their value over the past year, as compared with about a 6.5-percent dip in the Footsie.
Whitbread targeted by short-sellers
Bloomberg reported yesterday that according to data compiled by IHS Markit around 6.8 percent of Whitbread’s stock is on loan to short sellers, compared with just 0.3 percent on August 31, the day that Coca-Cola announced that it was buying Costa.
Shareholder confirmation of the sale “has removed a major catalyst for the stock,” Bernstein analyst Richard Clarke told Bloomberg by phone. “The story reverts back to the core hotel business and investors who had a negative view on Premier Inn’s prospects may now be more comfortable with putting back on their short positions.”
Analysts on Premier Inn owner
The 18 analysts offering 12-month price targets for Whitbread for the Financial Times have a median target of 4,900.00p on the shares, with a high estimate of 5,600.00p and a low estimate of 2,000.00p. As of October 13, the consensus forecast amongst 22 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 interim performance on October 24.