LONDON (ShareCast) - Positive broker coverage helped send shares in Whitbread higher after the coffee shop and hotel chain operator reported a 7% rise in like-for-like sales Thursday morning.

Cazenove, which reiterated its ‘outperform’ rating on the stock, said the statement showed that any signs of a slowdown are limited to the group’s Costa Coffee chain. It pointed to ‘impressive growth’ at its Premier Inn hotel chain.
Another broker, Investec, also repeated its ‘buy’ advice on Whitbread.

However, KBC Peel Hunt remains ‘neutral’ on Whitbread. It said that the Premier Inns division is enjoying an ‘Aldi effect’ as companies seek to reduce expenses, but added that rising unemployment in 2009 may overtake this.

JP Morgan has moved its ratings on technology companies Invensys and Smiths Group in opposite directions on valuation grounds.

It upgraded engineer Invensys to ‘neutral’ from ‘underweight’, saying that the US appliance market was near a trough.

However, it now has an ‘underweight’ rating on Smiths Group, which supplies equipment for sectors such as defence, healthcare and oil, from ‘neutral’ previously. The downgrade was made on the grounds of ‘high valuation, low earnings quality and too high expectations on new strategy,’ JPM said.

The broker also trims its target price on Invensys to 332p from 335p and on Smiths to 1,075p from 1,150p.

News that Unilever has poached Paul Polman as chief executive from Nestle was tempered slightly by Lehman Brothers downgrading the food and household goods giant to ‘underweight’ from ‘equal-weight’. The broker also cut its target price on Unilever to €19.4 from €22.8.

Elsewhere in the household goods and food sector, Lehman trimmed its target price on Reckitt Benckiser, the company behind brands such as Finish dishwasher tablets and French’s mustard, by 55p to 2,945p. It keeps its ‘equal-weight’ stance on the stock.

However, it raised its target price on chocolate manufacturer Cadbury to 800p from 716p, maintaining its ‘overweight’ rating.

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