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Berenberg upgrades Restaurant Group, downgrades Wetherspoons

Thu, 06th Jan 2022 13:46

(Sharecast News) - Berenberg reviewed its ratings on a number of leisure stocks on Thursday from pubs to restaurants and travel firms.
The bank downgraded JD Wetherspoon to 'hold' from 'buy' and cut the price target to 1,050p from 1,650p. It also downgraded On the Beach to 'hold' from 'buy' and reduced the price target to 320p from 400p.

Berenberg said it still thinks Wetherspoons is a very well-run business with a significantly differentiated value offer. "However, we think it could be a while before the type of sales momentum needed to drive a meaningful re-rating from its already sector-leading valuation multiples returns to the business.

"As a result, we downgrade our rating to hold but continue to fundamentally like the shares in the event of any significant pullbacks."

As far as OTB is concerned, Berenberg said it has admired the stock since 2016 and still believes in the business model. "However, we feel the recent lack of clarity on margins in the upcoming years creates too much risk to earnings estimates, particularly with the shares trading at c17x 2023E P/E (including full credit for a rebound in margins). As a result, with the shares having rallied circa 40% in the past month, we downgrade."

Wagamama owner Restaurant Group was upped to 'buy' from 'hold' with an increased price target of 125p from 110p, while WH Smith also received the same rating upgrade, with a price target hike to 1,900p from 1,750p.

Berenberg said it has been warming up to Restaurant Group "for a while now", and with the shares around 30% off last year's highs, now is the time to upgrade the recommendation. "With the right management now instated, we think that the company can grow earnings per share at a double-digit rate for the foreseeable future, believe there is scope for upside to our recovered earnings estimates in 2023 and beyond, and envisage the business being the market leader and natural consolidator over the medium term."

The bank said it has always seen WH Smith as a great business that generates excellent returns on capital and there is no reason why it cannot continue to replicate that in the future. "With the shares down around 25% from last year's highs, we upgrade our rating to buy," it said.

Berenberg's top mid-cap pick is National Express, while its top small-cap pick is Hollywood Bowl, both of which it rates at 'buy'.
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26 May 2022 09:40

IN BRIEF: FirstGroup considers takeover offer from I Squared Capital

FirstGroup PLC - Aberdeen, Scotland-based transport provider - Receives "series of unsolicited, conditional proposals" to be acquired by I Squared Capital Advisors (UK) LLP. Says considering latest approach, received Wednesday evening, for 118 pence per share in cash, plus 45.6p more contingent on the proceeds of FirstGroup's recent disposals of First Transit and Greyhound. The 163.60p total offer is a 38% premium to Wednesday's close. Previous approaches all were unanimously rejected by the board, FirstGroup says.

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20 May 2022 18:30

IN BRIEF: Pan-European's bid for Stagecoach becomes unconditional

Stagecoach Group PLC - Perth, Scotland-based transport provider - Pan-European Infrastructure III SCSp, an infrastructure fund managed by DWS Infrastructure, receives acceptances from 363.9 million shares in Stagecoach, reflecting a 66% interest in the company, clearing all conditions for its GBP594.9 million bid and making the offer unconditional.

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16 May 2022 13:24

National Express says Stagecoach offer now final

(Sharecast News) - National Express on Monday said it would not lift its offer for fellow transport operator Stagecoach.

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16 May 2022 12:15

IN BRIEF: National Express refuses to raise offer for peer Stagecoach

Stagecoach Group PLC - Perth, Scotland-based transport provider - National Express Group PLC confirms it will not raise the takeover offer for public transport peer Stagecoach that it made back in March. National Express says it believes its all-share combination with Stagecoach remains the better deal for Stagecoach shareholders, after being spurned for a cash offer from a fund managed by DWS Infrastructure. National Express notes its offer of a 0.36-times share exchange ratio currently values each Stagecoach share at 90 pence, which is below the DWS offer of 105p in cash. However, when including synergies, this rises to about 113p, a 7.6% premium. "National Express therefore considers the terms of its proposal to be full and fair and has decided that the terms will not be increased and are now final," it says.

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16 May 2022 09:04

LONDON MARKET OPEN: China data slump sends European stocks lower

(Alliance News) - Stocks in Europe opened the new trading week with a cloud hanging over them after disappointing economic data from China showed its zero-Covid policy threatens global economic growth.

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16 May 2022 07:52

LONDON MARKET PRE-OPEN: Ryanair loss narrows; Plus500 trading strong

(Alliance News) - The FTSE 100 looks set to start the new trading week on the back foot, following less than stellar data in China on Monday that showed the fallout from the country's zero-Covid policy.

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5 May 2022 13:15

UPDATE: DWS fund lowers acceptance condition for Stagecoach offer

Stagecoach Group PLC - Perth, Scotland-based transport provider - Bidder lowers the acceptance condition for its agreed takeover offer to 50% from 75%. Pan-European Infrastructure III SCSp, an infrastructure fund managed by DWS Infrastructure, has acceptances for its offer representing 30% of Stagecoach shares, unchanged from recent announcements. DWS decided to reduce the acceptance condition in order to provide more certainty to Stagecoach shareholders, as the deal is more likely to complete as a result, a spokesperson explains.

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5 May 2022 11:51

IN BRIEF: DWS fund lowers acceptance condition for Stagecoach offer

Stagecoach Group PLC - Perth, Scotland-based transport provider - Bidder lowers the acceptance condition for its agreed takeover offer to 50% from 75%. Pan-European Infrastructure III SCSp, an infrastructure fund managed by DWS Infrastructure, gives no reason for the decision. It says it has acceptances for its offer representing 27.5% of Stagecoach shares, essentially unchanged from recent announcements.

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4 May 2022 15:53

UK shareholder meetings calendar - next 7 days

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28 Apr 2022 12:01

Premier Inn owner Whitbread resumes dividend as UK recovery builds

April 28 (Reuters) - Premier Inn owner Whitbread resumed dividends on Thursday and said profit at its UK business could return to pre-pandemic levels this year despite inflationary pressures.

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26 Apr 2022 17:01

LONDON MARKET CLOSE: Stocks mixed as dour US open sours sentiment

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26 Apr 2022 12:08

LONDON MARKET MIDDAY: Europe regains poise as eyes turn to US tech

(Alliance News) - European equities were enjoying a better day on Tuesday, with markets enjoying some respite after two successive days of sell-offs.

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26 Apr 2022 11:04

SMALL-CAP WINNERS & LOSERS: National Express lifts transport providers

(Alliance News) - The following stocks are the leading risers and fallers among London Main Market small-caps on Tuesday.

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26 Apr 2022 10:02

TOP NEWS: National Express shares up as March revenue beats March 2019

(Alliance News) - National Express Group PLC on Tuesday said revenue in March beat the same month of the pre-pandemic year 2019.

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26 Apr 2022 07:54

LONDON MARKET PRE-OPEN: AB Foods warns Primark must raise prices

(Alliance News) - Stocks in London are seen opening higher on Tuesday, taking heart from a decent trading day in New York overnight, where the tech sector got an M&A boost.

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