Berenberg cuts Whitbread target price, flags ambitious five‑year plan

(Sharecast News) - Berenberg lowered their target price on Premier Inn owner Whitbread from 2,900p to 2,280p on Monday as it said the firm had delivered the operational "reset" it had outlined earlier in the year, but argued that the company's new fiveyear plan still relies on ambitious assumptions and remains heavily weighted toward later years.

Berenberg said Whitbread's updated strategy continued to depend on consistent UK revenue per available room growth and the successful deployment of �1.5bn of saleandleaseback proceeds, while nearterm visibility remained limited.

The German bank, which has a 'hold' rating on the stock, also noted that leverage was close to the group's threshold and that the pause in buybacks for FY27 would constrain shareholder returns.

Whitbread reported FY26 revenue of �2.92bn and pre-tax profits of �483m, broadly flat yearonyear and slightly ahead of the broker's expectations. However, guidance for FY27 included several headwinds - an extension of its Accelerating Growth Plan, higher cost inflation, oneoff charges in Germany, Middle East impacts, lower roomgrowth expectations and the suspension of buybacks.

The company's new fiveyear plan includes a �110m businessrates headwind, offset by expected contributions from UK network expansion, the extended AGP and further progress in Germany. Whitbread was now targeting FY31 pre-tax profits of �648m, but Berenberg said it was remaining cautious and forecast just �561m.

Reflecting nearterm foodandbeverage closures, Berenberg cut its revenue estimates by 6 to 10% and trimmed earnings per share forecasts by 15 to 21%. It now expects FY27 pre-tax profits of �379m.

Reporting by Iain Gilbert at Sharecast.com