WTB13 Dec 2012 08:00
Whitbread is benefiting from the woes of its rivals – and this should continue into next year, despite the challenging backdrop, as the company benefits from its “robust” business model. Nevertheless, it does need to execute on its expansion plans, both at home and abroad, without sacrificing the quality of its offering. With the above in mind, The Telegraph´s Questor team says that it has not looked at Whitbread shares since September 2010, when a buy was recommended at £15.02. They have since performed very well. Expansion plans should continue to boost operating profit, which has risen by almost 70% over the past five years. Trading on a 2013 earnings multiple of 16, falling to 15 next year and yielding a prospective 2.3%, the valuation looks pretty full, the newspaper adds. Indeed, the average price target of the 16 City analysts monitored by Bloomberg is £23.63, some 5% below the current price. Hold, Questor says.