JP Morgan cuts Greene King target price, stays at 'neutral'
(ShareCast News) - Analysts at JP Morgan marked down their target price for shares of pub operator Greene King on anticipated lower sales growth at its main unit, Pub Company.
More specifically, they cut their fiscal year 2018 forecast for profits before tax by 4% to £260m, anticipating like-for-like growth of 0.1% at Pub Co., down from 1.7%.
Their fiscal year 2019 PBT forecast also came down, by 6% to £270m, based on LFL growth of 0.8% at that same unit, versus 1.5% before.
As a result, their target price for the shares was revised lower, from 750p to 650p, and their recommendation kept at 'neutral'.
In the same research note, JP Morgan noted how LFLs appeared to take a turn for the worst since mid July due to the wet UK 'summer'. However, weakness was concentrated in the company's value food segment and management had responded with "measured capital investment".
They also noted management caution due to weaker consumer confidence, higher costs and heightened competition, although Pub Partners and Brewing & Brands had performed better over the first 18 weeks of the year.