Source: Sharecast
The bank said it was reshuffling its preferences within hotels, 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.
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.
Citi lifted its price target on Dowlais on Friday to 72.0p from 58.0p following the company’s full-year results earlier in the week.
It said Dowlais had once again demonstrated a solid execution in a very difficult business.
"DWL is making some slow progress on margin improvement, but this is tough in a falling volume environment, as demonstrated by significant restructuring charges and impairments, also impacting free cash and net debt, which remains high," the bank said. "Post FY24 results, we make low single digit changes to our 2025-26E earnings per share estimates to account for the new guidance but raise our TP to 72p from 58p reflecting a better long-term margin outlook (solid execution) and improved cash flow (after portfolio restructuring)."
Citi noted that Dowlais shares have traded near 70.0p since the acquisition announcement with American Axle, which is well below the initial offer value, as AAM shares have also declined.
"We expect the offer continues to support the shares," said Citi, which maintained its ‘neutral’ rating on the stock.
Analysts at Berenberg raised their target price on consumer goods giant Reckitt Group from 5,177.0p to 5,920.0p on Friday but warned of "risks on all sides" as 2025 unfolds.
Berenberg noted that Reckitt's recently released FY24 showed Q424 group like-for-like sales growth of 4.6%, below visible alpha consensus expectations of 5.5%, driven by price/mix of 2.8% and volumes of 1.8%.
At the divisional level, Berenberg pointed out that hygiene achieved like-for-like sales growth of 5.5%, health was up 2.4%, and nutrition sales were 8.4% higher. Actual group sales of £3.54bn came in roughly 1% below consensus expectations but FY24 adjusted operating margins of 24.5% at the group level were well ahead of consensus forecasts of 23.3%, driving a 5% beat on adjusted operating profits.
For 2025, Berenberg forecasts like-for-like sales growth of 2.8%, down from 5.0%, an FX impact on sales of -2.1%, an adjusted EBIT margin of 25.0%, and net finance costs of £351.0m.
"Our 2025 EPS estimate is unchanged at GBP3.49. Our 12-month price target rises to 5,920p (previously 5,177p), driven by the roll-forward of our DCF model and reflection of lower bond yields (0.2% lower WACC)," said the German bank, which maintained its 'hold' rating on the stock.
