Analysts See Value in PPHE Despite 7% Post-Results Share Slide

Analysts at h2Radnor and Shore Capital said in notes that PPHE Hotel Group (LON:PPH) shares materially undervalue its asset base, following a 7% fall on Thursday in response to first-half results. The stock is down a further 2% on Friday morning.

h2Radnor analyst Robert Plant reinitiated coverage of the company, which is a research client of the firm, after the conclusion of the group’s strategic review, cutting his 2026 EBITDA forecast 5% to £140.1 million and his 2027 estimate to £150.1 million, mainly because UK business rates have risen more steeply than he expected a year ago.

That leaves him at the bottom of the £140 million to £147 million consensus range the company disclosed.

He also trimmed his illustrative fair value, based on a four-stage sum-of-the-parts model, by 11% to £22.09 per share.

Despite the share price plunge, Plant described the results as reassuring “especially given the backdrop of the Iran conflict and higher taxes in the UK and the Netherlands,” pointing to like-for-like revenue growth of 5.5% and a margin improvement to 23.5%.

Meanwhile, Shore Capital’s Greg Johnson said UK strength drove the performance, with RevPAR there up 5.9%, “comfortably ahead of the broader market,” while Germany and the Netherlands proved more challenging.

Shore Capital, which acts in an advisory capacity to PPHE, called the profit conversion particularly encouraging given higher business rates and the Dutch accommodation VAT increase.

Johnson said the robust first half is supportive of market estimates, and argued a 0.6 times book multiple fails to reflect a £2.4 billion property portfolio, improving cash flow and optionality from the asset base.