Barclays expects excellent Q4 from Whitbread

Barclays Capital has upgraded Whitbread (LON:WTB) to ‘equal weight’ from ‘underweight’ stating that it expects the Premier Inn and Costa Coffee owner to report a good third quarter and an excellent fourth quarter when the group releases its trading commentary on 26th January.

“As we have been discussing in our weekly notes (see RevPAR weekly, 12/1/17), data for London and the UK regions has been exceptionally strong,” Barclays explained.

“While WTB has had a good run as investors have seen this data, we still see potential for the update to be a positive catalyst.”

Analysts have upped their price target by 24 per cent, or 810 pence, to 4,150 pence a share.

In the utilities sector, analysts at Berenberg reckon the bond-market-led fall in National Grid’s (LON:NG.) share price at the end of 2016 has created an opportunity for investors to buy into a robust income stock.

The bank added: “We do not believe that the current share price fairly reflects the £4bn net proceeds that National Grid expects to return to shareholders from the sale of its Gas Distribution stake starting in Q2 2017.

“We expect an 85p (8.9%) special dividend and the launch of a £1bn share buyback programme.”

Berenberg upgraded its recommendation to ‘buy’ (from ‘hold’) and increased its price target to 1,050 pence per share (from 970 pence).

Meanwhile, Cantor Fitzgerald turned its attention to pharmaceuticals believing UDG Healthcare (LON:UDG) has evolved into a “partner of choice” for the industry, primarily through its acquisitions.

The brokerage said: “Although still lacking scale in the US contract sales and healthcare comms markets, we expect UDG to continue to use M&A to improve its position, particularly in the US.

“Success here should further drive growth and margin expansion.”

Cantor has hiked its target price to 780 pence per share (from 600 pence), forecasting double digit growth in profits and an expanding margin, and reaffirmed its ‘buy’ call on the shares.

At 2:58pm:

(LON:NG.) National Grid PLC share price was +0.7p at 937.2p

(LON:UDG) UDG Healthcare PLC share price was +10.25p at 660.25p

(LON:WTB) Whitbread PLC share price was +66.5p at 4137.5p

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