Broker tips: Whitbread, Hochschild Mining

Bernstein upped its stance on shares of Premier Inn owner Whitbread on Thursday to 'market perform' from 'underperform' as it hailed the company's increased flexibility.

The bank said Whitbread's half-year results earlier this week showed that "flexibility is not dead".

"Unit growth is set to slow, exists will accelerate and they are looking to innovation to deliver growth," it said. "Talk of optimising the existing portfolio and perfecting the property base is music to our ears."

It said that this messaging, along with limited valuation downside to its target price - which was cut to 4,000 from 4,200p - prompted the move to neutral.

Whitbread posted a drop in first-half profit on Tuesday as like-for-like accommodation sales in the UK fell amid "challenging" market conditions.

Analysts at Berenberg slightly raised their target price on precious metals miner Hochschild Mining from 180p to 190p on Thursday following a "strong" quarter of operations.

Berenberg said Hochschild's operations appeared to be on track following its last trading update, with a slight beat versus its own estimates after the firm deliver 81,000 ounces of gold and 5.3m ounces of silver.

The German bank pointed out that Hochschild's Inmaculada mine was the driver of the beat, coming in ahead of estimates due to stronger grades and throughput, but did note that the Pallancata project posted a slight miss versus forecasts. San Jose was in line.

Hochschild now expects to meet its 2019 production guidance of 457,000 oz gold equivalent on an attributable basis, which Berenberg said would require "a material downward drift in grades" during the fourth quarter of the year.

With management giving clarity on the grade outlook for 2019 at Inmaculada, Berenberg said assuming Hochschild's other mines were broadly steady, it now anticipates attributable production of 38.5m oz versus guidance of 37m oz.

Berenberg adjusted its model for Q3 actuals and made positive revisions to its gold and silver price forecasts, which were accretive to its earnings and valuation. It also adjusted for currency weakness in Argentina and sterling strength.

However, the analysts also said they continue to believe that at 1.41 times net asset value the shares were fully valued and maintained its 'hold' rating.