Two City analysts have upgraded Whitbread, the operator of Premier Inn, Costa Coffee and a clutch of restaurant brands, ahead of the company’s preliminary results next week. Hugh-Guy Lorriman, of Seymour Pierce, described Whitbread as a “business with momentum” that has “unrivalled balance sheet strength”. Meanwhile, Simon French, of Panmure Gordon, said he expected the group’s outlook statement “to report continued encouraging trading”. Seymour Pierce has a target price of 1,950p and said it had brought its forecasts in line with consensus, moving its full year 2010 profit before tax prediction from £187.5m to £239m. EPS was also improved from 76.5p to 97.5p Lorriman added: “We have been behind, but the upgrade shows the trend in earnings momentum in the business. Over the last year the Costa business has performed superbly with LFLs well ahead of expectations. Pub restaurants have also been much stronger than our original expectations and the declining trend in revenue-per-available room (revpar) in Premier Inn has started to unwind.” French, at Panmure Gordon, increased his target price to 1935p and said the price reflected a 6% upgrade to the company’s 2010 earnings. He said the group had turned a corner with its Premier Inn hotel brand and would see a 2% increase in revpar – a key performance indicator in the hotel industry. French added: “For FY 2010E we forecast Whitbread will report £240.8m PBT (96.9p EPS). This is at the top of the range of £230-241m and slightly ahead of consensus expectations of £235m. "The group’s pre-close statement highlighted encouraging trends in hotels, with revpar reportedly flat for the 12 weeks to 18 February and Costa Coffee growing like-for-like sales by 9.5% and pub restaurants 1.3%.”