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On Monday, Deutsche Bank (ETR:DBKGn) analysts, led by Tim Barrett, adjusted their outlook on Whitbread PLC (LON:WTB:LN) (OTC: WTBCF), reducing the price target to GBP37.50 from the previous GBP41.50 while maintaining a Buy rating on the stock. The revision was prompted by a combination of weaker-than-expected performance data for March and a negative forecast for April.
Barrett noted that the March data showed a decline in the short-term rental (STR) rate of -4.7%, and the proprietary Average Daily Rate (ADR) scrape for April indicated a further -11% drop. These figures led to a more cautious stance on near-term trading for the company. As a result, the new forecast for Fiscal Year 2026 includes a -2% assumption for Revenue per Available Room (RevPAR) and an approximate 8% downgrade in Earnings Per Share (EPS).
Despite the downward revision, the stock’s performance year-to-date, which has seen a 15% decline, is believed to have already factored in the anticipated downturn. Barrett suggests that the shares may continue to experience volatility as investors weigh the company’s valuation against its momentum. He highlighted that Whitbread’s valuation remains appealing, with a Fiscal Year 2026 Price-to-Earnings (P/E) ratio of 12.3 times, which adjusts to 11.3 times pre-IFRS16 accounting standards.
The analyst’s comment underscores the abundance of real-time data in the sector, which often leads to rapid price adjustments in the market. Despite the near-term challenges, Deutsche Bank’s stance on Whitbread shares remains positive, as evidenced by the retention of the Buy rating.
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