A leading analyst has reiterated his hold recommendation for Whitbread on the back of the group’s full-year update last week, and for FY 2013E forecast a 1% decline in Premier Inn RevPAR, flat like-for-like sales in pub restaurants and 2% like-for-like sales growth in Costa UK. Simon French at Panmure Gordon said: “There is no change to our FY 2013E PBT forecast of £329m when we assume flat Hotels & Restaurants profits and a 20% increase in Costa profit. Over the next three years we forecast a 10% CAGR in EPS but still think the risk to forecasts is on the downside and continue to forecast a 1% decline in Premier Inn RevPar this year. The stock trades on a CY 2012E P/E of 13.7x and an adj EV/EBITDAR of 8.2x and yields just 2.8%. We reiterate our Hold recommendation and modestly increase our TP to 1789p (from 1768p). “The group has guided towards 5% food cost inflation and 2.5% labour cost inflation in Restaurants. The group will spend a similar amount of capex and undertake a similar size sale and leaseback as it did in FY 2012A. “Overall we anticipate that net debt will end FY 2013E broadly unchanged at c£509m. The group will introduce new ROCE based incentive scheme targets (alongside EPS targets), which will not capitalise operating leases and therefore we view as an unsatisfactory measure of incremental value creation.”