Mitchells & Butlers Advances on Earnings Outlook: London Mover

Mitchells & Butlers Plc (MAB), the owner of the All Bar One pub chain, rose to the highest in more than five years amid investor optimism that trading will improve and boost profit.

The shares jumped as much as 8.3 percent, the biggest intraday gain since Jan. 31, and were up 4 percent at 392.4 pence at 3:03 p.m. in London, the highest since March 2008. Mitchells & Butlers has gained for nine straight days, the longest winning streak since October 2006. The volume of shares traded was more than twice the daily average.

The stock broke through its upper Bollinger band today. Trend investors employ strategies that aim to benefit from momentum in prices, whether rising or falling. They look for signals that a trend will continue or may end, often using technical indicators, such as Bollinger bands, a measure of stock price volatility, and moving averages.

Pretax profit for the six months ended March 31 may rise 9 percent to 74 million pounds ($113 million), Douglas Jack, an analyst at Numis Securities Ltd. with a buy recommendation on the stock, said in a note to clients two days ago. The company is scheduled to publish the results on May 23.

The increase will be driven by the company’s expansion and falling interest costs, said Jack, who raised his 12-month price target to 450 pence from 400 pence.

The shares trade at about 10 percent less than those of similar companies and offer good value considering the business has one of the best pub estates with 45 percent of its outlets in southeast England, he said.

Enterprise Inns Plc surged 13 percent yesterday after reporting a fall in debt.

To contact the reporter on this story: Peter Woodifield in Edinburgh at pwoodifield@bloomberg.net.

To contact the editor responsible for this story: Douglas Lytle at dlytle@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.