Broker tips: Whitbread, Unilever, Asos

(Sharecast News) - Analysts at Berenberg lifted their target price on Whitbread to 2,700p from 2,400p following measures announced in the 2026 UK Budget, although they retained a 'hold' rating as they continues to seek further evidence that the Premier Inn owner's turnaround strategy has gained traction.

Berenberg said changes to business rates represented a meaningful positive for Whitbread after several years of rising cost pressures, with preliminary estimates suggesting business rates will increase by between £7.5m and £12.5m in FY28, significantly below previous market expectations of around £35m, prompting the bank to raise its FY28 and FY29 pre-tax profit forecasts by 4% and 6%, respectively.

While the analysts highlighted encouraging progress in the first half, including five consecutive quarters of UK revenue per available room growth, they warned that leverage remains elevated and that Whitbread was still reliant on property disposals to help fund its long-term growth plans.

Berenberg noted that proceeds from asset sales have so far lagged expectations, with Whitbread needing at least £425m of disposal proceeds to meet its FY26 target. Failure to achieve that could leave leverage above the group's preferred threshold.

The German bank said the Budget provided additional breathing room for management to execute its five-year strategy, but also highlighted that continued cost inflation and a back-end-loaded earnings recovery meant it was not yet ready to turn more positive on the shares.

Deutsche Bank upgraded Unilever on Wednesday to 'buy' from 'hold' and lifted its price target on the stock to 5,350p from 5,300p.

Deutsche Bank also said it still sees considerable structural and cyclical headwinds for the Staples sector.

"However, we believe that Unilever offers a balance of longer-term transformation potential, near-term earnings confidence, and liquidity benefits to hedge AI risk in a balanced portfolio," it said.

"The scale of content creation and improved engagement also offers another potential benefit versus small peers."

Investec upgraded Asos to 'buy' from 'hold' and hiked its price target on the stock to 560p from 500p, as it said the online fashion retailer was now "a more investable story".

Investec noted that management has repaired the business economics and balance sheet.

"EBITDA is back in growth," it said. "Management's original medium-term profitability targets were largely delivered in FY26. The gross margin was above its 50% target and the EBITDA margin reached 7.6% versus its medium-term target of circa 8%."

Investec pointed out that the fourth quarter of 2026 marked a return to group gross merchandise value growth for the first time since 2022. GMV trends improved sequentially throughout FY26, with the turnaround broadening out, it said. In the second half, UK GMV was up 2% and Germany saw an 8% increase year-on-year, while USA GMV turned positive in Q4.

The broker said management guided to FY27 adjusted EBITDA of £180m to £200m versus consensus of £177m, or a range of £162m to £200m. However, Investec also said it still forecasts a loss at the pre-tax profit level in FY27, with the group moving into profit in FY28E.

Invested said its price target increase reflects more positive free cashflow expectations going forward due to top-line and underlying earnings progression.

"Management is looking to refinance again in FY27 now that leverage is down at 0.6x. This would support further upside to DCF valuation," it said. "We expect proof points to build through FY27, helping confidence in the sustainability of growth, margin and free cash flow over the longer term."