Analysts at Berenberg raised their target price on bar and restaurant operator Loungers from 350.0p to 390.0p on Thursday, stating the group was going from “strength to strength”.
Berenberg stated that after Loungers published a trading update that revealed like-for-like sales growth had accelerated versus 2019 to an average of roughly 27% since re-opening in mid-May, it was now “increasingly confident” in both the firm’s near-term momentum and its longer-term growth trajectory.
The German bank said its full-year 2022 like-for-like forecast of roughly 10.5%, up from 6.5%, versus 2019 still implied like-for-like growth of only about 4% over the course of the second half, despite an estimated uplift of roughly 6% during that period relating to a reduced VAT rate of 12.5% until March 2022.
However, Berenberg said it was worth highlighting that, all else equal, every incremental one percentage point increase to its like-for-like expectations could boost its full-year earnings per share estimates by as much as 8%.
“Given the extent and endurance of Loungers’ market outperformance, we feel increasingly confident in both near-term momentum and its longer-term growth trajectory,” said the analysts, who also reiterated their ‘buy’ rating on the stock.
