J D Wetherspoon: Solid Trading Momentum and Undemanding Valuation Underpin Buy Rating

J D Wetherspoon, the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst James Wheatcroft from Jefferies maintained a Buy rating on the stock and has a p825.00 price target.

James Wheatcroft has given his Buy rating due to a combination of factors that, in his view, support an attractive risk‑reward profile for J D Wetherspoon. He highlights that like‑for‑like sales are growing solidly, with particularly strong trading over the key Christmas period and year‑to‑date revenue expansion already outpacing market expectations. He also notes that different parts of the business, such as bar and machine revenues, are delivering healthy growth, helping to offset weaker areas like hotel sales. In addition, the company’s decision to continue opening new pubs this year is seen as a sign of management confidence in its ability to win further market share.

At the same time, Wheatcroft acknowledges that the group is facing additional cost pressures, which are likely to prompt modest downward revisions to earnings forecasts. However, he considers the current valuation to be very modest compared with the company’s historical trading multiples, with the shares implying a much sharper EBITDA decline than he believes is realistic. In his assessment, this disconnect between the solid operating momentum and the conservative expectations embedded in the share price creates a compelling entry point for investors. Consequently, these factors together underpin his Buy recommendation on J D Wetherspoon.