Analyst James Wheatcroft of Jefferies maintained a Buy rating on J D Wetherspoon (JDW – Research Report), with a price target of p825.00.
James Wheatcroft has given his Buy rating due to a combination of factors that suggest a positive outlook for J D Wetherspoon. The company’s like-for-like sales have shown consistent growth, aligning with early-year performance, and they anticipate a favorable outcome for the year, supported by recent good weather conditions. Despite the additional annual costs due to the UK Budget, Wetherspoon’s low pricing strategy positions it well to absorb these impacts, especially as increased wages affect the entire industry.
Furthermore, while there are concerns about the UK consumer’s future prospects, the valuation of Wetherspoon remains attractive. The shares are currently trading at a relatively low EV/EBITDA multiple, suggesting that the market has already priced in significant challenges. This undemanding valuation, combined with the company’s ability to mitigate budget-related costs through strategic pricing, supports Wheatcroft’s Buy recommendation.