Source: Sharecast
The owner of Premier Inn, Beefeater and Brewers Fayer, among others, announced plans last month to overhaul its struggling food and beverage (F&B) business, including closing sites and cutting 1,500 jobs.
Jefferies said the accelerated growth plan meant it now had a "clear line of sight on the F&B turnaround, stronger long-term UK margins, pipeline trajectory and market share growth".
It continued: "In the next 12 months, the re-rating catalyst path stems from potential second quarter revenue per available room inflection, after a damp first quarter; Germany break-even in the second half; and operating expenses inflation rollover in the 2026 full year.
"Estimates also appear de-risked on the known unknowns, sensitivities inside."
The broker concluded: "With earnings largely de-risked - our 2025 full year estimated adjusted pre-tax profits are £525m versus consensus for £533m - and a clear path to re-rating, we reiterate our ‘buy’ rating.”
The broker trimmed the price target to 4,000p from 4,200p on higher leases.
As at 1000 BST, shares in the FTSE 100 stock were largely unchanged at 2,970p.