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Restaurant Group PLC (LSE:RTN) has “organic recovery potential” that’s according to Citigroup’s London-based analysts.
Citi, in a note today, stuck with a price target of 52p per share (current price: 38.42p) although revised down forecasts for the 2023/24 financial adjusting for margin guidance, following the Wagamama owner’s wider loss reported on Wednesday.
I must say I was surprised at the extent of the loss in the trading update - I didn’t see it coming - if that is all emanating from non performing F&Bs Chqtos then there is, if not criticism, a fair case for the Exec to answer I’m not exiting such more quickly. I’m unsure whether to top up or not now.
The loss was caused by a write down of asset values. Underlying profit was reasonable albeit with reduced margins due to economic headwinds and they had free cash flow of circa £40m which was not bad. Wagamama is worth the current valuation if not more on it's own. I await Oasis's next move with interest!
Hi all and at Davde, sense there’s not much action on SP now until material update : good to see slight rise but I’m guessing this SP only moves when Oasis act again and/or Exec make statement on future. I’d be okay with a break up to release value or PE take-out but I think for the latter probably best for a PE to bide time and sit tight : no reason to pounce right now unless you need to put funds to work. Keen to here other views on what might move this? Tah
Hi Ephemeral, Any positive economic news regarding inflation should see gains, any feel good factor news should add a significant %
Hi Spades, yes that makes sense (and I wonder how much despair is built into price already). I think some wider buyout activity would stoke interest too. I think RTN doesn’t survive as is : gets bought and broken up or breaks itself up.
Whatever happens the value of the business is higher than its current market cap., that's why I'm holding them.
There will be bumps, but baring economic melt down where you only own what you can carry in a backpack, this investment will pay.
GLA