(Sharecast News) - Citi kept its 'buy' rating on The Restaurant Group but cut its target share price by a quarter with uncertainty about consumer behaviour hanging over the restaurant sector.
The UK government is allowing pubs and restaurants to reopen on 4 July subject to relaxed social distancing rules. Citi said the timing was expected but that openings would be phased over coming weeks starting with pubs.
Advising clients to "take the medicine then wait for the recovery" Citi analysts left their 'buy' rating intact but reduced their price target on The Restaurant Group shares to 75p from £1. They estimated it would take until the 2022 financial year for revenue per site to be restored.
The analysts cut their estimates for earnings before interest and tax by 61% for 2021 and 29% for 2022.
"The reduction of the social distancing requirement from 2m to 1m should enhance industry capacity utilisation from c30% to c70% but the unknown element will be consumer appetite to visit restaurants," Citi's James Ainley and colleagues said in a note to clients. "Upside and downside risks [are] apparent."
Citi published its note on the day The Restaurant Group announced creditors had voted for a company voluntary arrangement that will close 125 poorly performing eateries and allow the company to renegotiate rents and leases with landlords. The group is closing branches of tired brands such as Frankie & Benny's and Chiquito's to concentrate on Wagamama, the popular chain it bought at the end of 2018.
17 May 2022 15:59
UK shareholder meetings calendar - next 7 days
| Wednesday 18 May | |
| ABCAM PLC | AGM |
| abrdn PLC | AGM in Edinburgh |
| Alliance Pharma PLC | AGM |
| Burford Capital Ltd | AGM |
| Coats Group PLC | AGM |
| CVC Credit Partners European Opportunities Ltd | AGM |
| EKF Diagnostics Holdings PLC | AGM |
| Highcroft Investments PLC | AGM |
| Impax Environmental Markets PLC | AGM |
| JPMorgan American Investment Trust PLC | AGM |
| Keller Group PLC | AGM |
| LMS Capital PLC | AGM |
| Merchants Trust PLC | AGM |
| PensionBee Group PLC | AGM |
| Permanent TSB Group Holdings PLC | AGM |
| PYX Resources Ltd | AGM |
| Riverstone Credit Opportunities Income PLC | AGM |
| Schroder UK Public Private Trust PLC | AGM |
| Science Group PLC | AGM |
| Seplat Energy PLC | AGM |
| TI Fluid Systems PLC | AGM |
| Vesuvius PLC | AGM |
| Thursday 19 May | |
| Bigblu Broadband PLC | AGM |
| Brand Architekts Group PLC | GM re takeover of InnovaDerma |
| Capital & Regional PLC | AGM |
| Computacenter PLC | AGM |
| Cornish Metals Inc | GM re equity raise |
| Dialight PLC | AGM |
| Ebiquity PLC | AGM |
| Eqtec PLC | AGM |
| Essentra PLC | AGM |
| Fevertree Drinks PLC | AGM |
| Gamma Communications PLC | AGM |
| Genuit Group PLC | AGM |
| Headlam Group PLC | AGM |
| Inchcape PLC | AGM |
| InnovaDerma PLC | GM re takeover by Brand Architekts |
| Irish Residential Properties REIT PLC | AGM |
| K3 Business Technology Group PLC | AGM |
| Light Science Tech Holdings PLC | AGM |
| Live Co Group PLC | GM |
| McColl's Retail Group PLC | AGM |
| musicMagpie PLC | AGM |
| Network International Holdings PLC | AGM |
| Next PLC | AGM |
| Pharos Energy PLC | AGM |
| Property Franchise Group PLC | AGM |
| Rotala PLC | AGM |
| Smart Metering Systems PLC | AGM |
| St James's Place PLC | AGM |
| Tyman PLC | AGM |
| Friday 20 May | |
| Bank of Cyprus Holdings PLC | AGM |
| Croda International PLC | AGM |
| Deliveroo PLC | AGM |
| Georgia Capital PLC | AGM |
| Hikma Pharmaceuticals PLC | EGM re capital reduction |
| Keywords Studios PLC | AGM |
| Real Estate Investors PLC | AGM |
| Reckitt Benckiser Group PLC | AGM |
| Resolute Mining Ltd | AGM |
| Restore PLC | AGM |
| Monday 23 May | |
| Brewin Dolphin Holdings PLC | GM re acquisition by RBC Wealth Management |
| Digital 9 Infrastructure PLC | AGM |
| Empiric Student Property PLC | AGM |
| TMT Investments PLC | AGM |
| Tuesday 24 May | |
| 4imprint Group PLC | AGM |
| Afentra PLC | AGM |
| Artisanal Spirits Co PLC | AGM |
| Bidstack Group PLC | AGM |
| Epwin Group PLC | AGM |
| FDM Group Holdings PLC | AGM |
| Forterra PLC | AGM |
| Harworth Group PLC | AGM |
| Henderson High Income Trust PLC | AGM |
| Hill & Smith Holdings PLC | AGM |
| Hilton Food Group PLC | AGM |
| Horizonte Minerals PLC | AGM |
| Judges Scientific PLC | AGM |
| Pebble Group PLC | AGM |
| Quarto Group Inc | AGM |
| Restaurant Group PLC | AGM |
| Riverstone Energy Ltd | AGM |
| Shell PLC | AGM |
| Thungela Resources Ltd | AGM |
| Vector Capital PLC | AGM |
| WPP PLC | AGM |
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