Deutsche Bank downgrades Wetherspoons to 'sell'
By Michele Maatouk
Date: Wednesday 26 Mar 2025
(Sharecast News) - Deutsche Bank downgraded its stance on shares of pub group JD Wetherspoon to 'sell' from 'neutral' on Wednesday, slashing the price target to 450p from 600p following interim results.
The bank pointed to the impact of changes related to the government's budget last October, which involved an increase in national insurance contributions and increases in the minimum wage and national living wage, which come into effect in April.
The national living wage is due to rise by 7%, while the national minimum wage is set to rise by 16%.
The bank said the changes were an "exogenous event", comparable to major events such as the UK smoking ban and the global financial crisis.
"Current sales momentum...implies a material shortfall versus the 7% cost growth we forecast for the sector," DB said.
"Similarly, supermarkets are passing less on to consumers (via price) owing to higher labour productivity.
"We would continue to avoid labour-intensive businesses with thin operating margins."
In the same note, Deutsche Bank said it was also remaining cautious on 'sell' rated Greggs.
At 1355 GMT, JDW shares were down 1.1% at 563.56p.
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