Whitbread: Strengthening Trading Momentum, Cost Efficiencies, and Strategic Growth Underpin Buy Rating

Analyst Jamie Rollo of Morgan Stanley maintained a Buy rating on Whitbread, retaining the price target of p3,100.00.

Jamie Rollo has given his Buy rating due to a combination of factors that point to improving trading momentum and earnings upside. In the UK, Whitbread’s Q3 hotel performance showed continued sequential recovery, with revenue per room now back to growth and current Q4 trends running ahead of the market, particularly driven by London. The company is maintaining its ambitious room expansion targets with openings weighted to the final quarter, which should support future revenue growth. In addition, the German business delivered stronger-than-expected RevPAR growth and outperformed the local market, reinforcing the international profit opportunity.

For the medium term, Rollo highlights incremental cost-efficiency gains, with upgraded FY26 savings translating into a higher profit-before-tax outlook. The company has also moderated its guidance on future business rates, implying further potential upside to earnings from FY27, even if the exact benefit is harder to quantify. Management is progressing well with the estate optimisation program, evidenced by strong planning momentum and active site work, which should enhance returns over time. Finally, Whitbread is actively assessing additional strategic options to lift profits, margins, and returns, with a detailed five-year plan update due in April, giving further optionality and visibility that supports the Buy recommendation.

Rollo covers the Consumer Cyclical sector, focusing on stocks such as Whitbread, Carnival, and Royal Caribbean. According to TipRanks, Rollo has an average return of 0.0% and a 52.12% success rate on recommended stocks.

In another report released on January 7, Citi also maintained a Buy rating on the stock with a £31.00 price target.