No recommendation
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.
(Sharecast News) - JPMorgan Cazenove downgraded Premier Inn owner Whitbread on Friday to 'neutral' from 'overweight' and slashed the price target to 3,000p from 4,400p as it took a look at European hotel stocks.
The bank said it was reshuffling its preferences within hotels, revisiting its 'overweight' on France's Accor and downgrading Whitbread "on the back of a fragile UK consumer from lower income demographics".
"We become more selective with regards to our preferences, given sustained discrepancy between segments and geographies, further focusing on equity stories combining a solid RevPAR momentum and near-term positive catalysts," JPM said.
It made Accor its "top pick" and sole 'overweight', with more than 20% upside potential, as it said it benefits from the best set-up in terms of above peers average trading momentum and re-rating potential.
As far as Whitbread is concerned, JPM said that while the shares have been weak for over a year now, down around 20%, the UK consumer seems to have deteriorated lately following the UK budget, with particular weakness in retailers weighted into spending from lower income demographics.
It noted that Greggs, B&M European Value Retail and Dunelm all disappointed the market in recent statements, as well as Poundland and Primark UK.
At 0925 GMT, Whitbread shares were down 1.2% at 2,501p.
The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website is not personal advice based on your circumstances. So you can make informed decisions for yourself we aim to provide you with the best information, best service and best prices. If you are unsure about the suitability of an investment please contact us for advice.