Whitbread share price: JPMorgan ‘underweight’ on group

JPMorgan Cazenove is ‘underweight’ on Whitbread (LON:WTB), pointing to deteriorating business momentum in the UK and the completion of the group’s share buyback. The comments come as the Premier Inn owner prepares to update investors on its interim performance on October 22.

Whitbread’s share price has climbed higher in London this Friday, having gained 1.08 percent to 4,477.00p as of 13:01 BST. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.15 percent higher at 7,355.53 points. The group’s shares have given up nearly four percent of their value over the past year, as compared with about a one-percent gain in the Footsie.

JPMorgan ‘underweight’ on Whitbread

JPMorgan Cazenove reinstated Whitbread as ‘underweight’ yesterday, and a price target of 3,800p on the shares, following a period of restriction. Sharecast quoted the analysts as commenting that with the £2-billion share buyback offer completed, most of the value unlocked by the Costa Coffee sale has been allocated.

“Business momentum has significantly deteriorated in the UK since the beginning of the year,” the broker continued, adding that as a pure UK domestic business, the Premier Inn owner “is the most exposed hotelier to the current economic and political UK turmoil”.

Whitbread wrapped up its capital return programme in July, having launched the share buyback in the wake of the sale of its Costa Coffee business to The Coca Cola Company, saying that it was not planning any further returns of capital.

Other analysts on Premier Inn owner

The 22 analysts offering 12-month targets for the Whitbread share price for the Financial Times have a median target of 4,500.00p, with a high estimate of 5,750.00p and a low estimate of 2,000.00p. As of September 12, the consensus forecast amongst 23 polled investment analysts covering the blue-chip group advises investors to hold their position in the company.