Coming into today’s YE update poor sector newsflow over the last 2 months had weighed negatively on the Marston’s share price. In this context a satisfactory update and pro-active steps in the form of cost savings next year should be welcomed by the market today. Whilst trading in the last 10 weeks has been more challenging, due partly to the wet weather, it’s not been a disaster for Marston’s. We do not expect consensus forecasts to change much today, but we are lowering our FY17 EPS by 3% and FY18 by 5%, to bring us broadly inline with consensus. We are now forecasting 9% PBT and 3% EPS growth in FY18. The shares trade on a lowly FY18 P/E of 7.3x and 8.1x EV/EBITDA with a compelling c.7% yield. We expect some relief around today’s update and the shares to react positively. We stay positive on the stock on mid-term growth and yield considerations but lower our 12m TP from 140p to 120p.
