Liberum lowers target price on Fuller, Smith and Turner

Analysts at Liberum lowered their target price on pub landlord Fuller, Smith and Turner from 820.0p to 700.0p on Friday, stating London was likely to drag on the group's recovery efforts.

Liberum said 2020 was "a transitional year" for Fullers, with results broadly in line before a roughly £10m pre-tax impact from the Covid-19 pandemic.

With Fullers' portfolio 91% asset-backed and "well invested", Liberum said the group was positioned well for confidence and demand to return, but cautioned the firm's "notable presence in central London" may take longer to recover.

"We estimate circa 13% of pubs are located in central London, which would normally deliver above-average AWS compared to the rest of the estate. This will likely be a drag on the pace of recovery," said the analysts.

So far, Fullers has reopened around 75% of its managed estate and the majority of its tenanted estate, with "an encouraging return in trading levels".

While the group aims to "return to normality" and resume capex in the fourth quarter of 2021, management kept guidance withdrawn, leading Liberum to lower forecasts and its target price on the stock based on "a more phased reopening".