The broker said it is getting its forecast reductions in before everybody else as the numbers will be badly scarred by Covid-19.
Peel Hunt now expects Whitbread to post a loss per share of 300p (220p previously) for the year to end February, 2021, and a loss of 46p in the following year compared to the previous forecast of earnings of 65p.
“Our new forecasts are bottom of the current range, and we do not expect investors to be surprised given the post-Christmas lockdowns.
“With good news still a way off, and following a period of strong share price performance, we are lowering our recommendation from Buy to Hold and changing our target price from 3,000p to 3,100p.”
Underlying losses for 2021 are forecast at £692mln based on revenue being down 70% with a loss of £112mln in 2022and a further 25% drop in revenue.
At 27 August Whitbread had over £2bn of available liquidity, £936m in cash and £950m represented by an RCF maturing in September 2022.
The £600mln UK-CCFF loan matures in 2021, but could be renewed subject to the company’s credit rating being no lower than BBB- (the current level).
“The cash outflow in 1H21 was £462mln, which gives us comfort that the £2bn liquidity cushion is sufficient, even if forecasts fall further.”
Shares fell 1.3% to 3,055p.