- Whitbread
- 16 October 2025 10:48:37
Source: Sharecast
The broker kept a 'buy' rating on the stock, saying that the current valuation doesn't reflect the earnings potential of the business.
Whitbread said first-half profit before tax (PBT) fell 7% to £316m, which was slightly below Shore Capital's expectations, reflecting a modest decline in UK revenue per available room (RevPAR), cost inflation and lower interest income, though this was partly offset by additional rooms and lower losses in Germany.
However, the company downgraded its full-year adjusted PBT guidance for Germany to "up to £5m", from previous guidance of between £5m and £10m. It pointed to a softer market performance in the second quarter as there was a lower number of high-impact events this year.
"The outlook statement is confident so we would anticipate RevPAR assumptions getting in nudged up, although we some additional headwinds, we would not expect much change to PBT estimates," Shore Capital said. The broker has currently pencilled in a full-year PBT of £464.3m for the year to February 2026, down from £484m last year.
As for the stock's valuation – trading at 16 times earnings at an EV/EBITDA of 9x (excluding leases) – the market is "fail[ing] to account for the potential earnings uplift from the Accelerating Growth Plan in the UK, new rooms and German profit growth [...] along with the property backing and limited debt levels," Shore Capital said.
Shares were down 8% at 2,964.64p by 1047 BST.