Marston's - to add good cheer for investors, shares 60p, TP 80p

Mark Watson-Mitchell - 28.01.2026

Ahead of today's AGM, Marston's (LON:MARS), the brewery group, issued a First Quarter Trading Update for the 17-week period to Saturday, 24th January.

For that period, the Group made a few major points:

• Strong trading performance over the festive period where like-for-like sales increased by 4.0%, with growth of 5.6% across the five key festive dates, reinforcing the strength of Marston’s community-based estate during peak trading occasions.

• Like-for-like sales for the 17 weeks have remained resilient, with performance tracking in line with the prior year and continuing to outpace the total market.

• Pub format roll-out continues to accelerate, with 23 launches completed in Q1. New format sites continue to outperform, supporting the Group’s plan to complete more than 50 in FY2026.

• Execution of the Group’s market-leading pub operating model is driving further margin improvement this year, underpinned by disciplined cost control and ongoing efficiency initiatives.

• A strong programme of demand-driving events, including the return of Luke Humphries’ Cool Hand Cup and Trivial Pursuit: Win a Wedge, new initiatives including a partnership centred on Matilda, one of Roald Dahl’s most loved characters, and the 2026 FIFA World Cup – which represents a significant summer trading opportunity – provide further confidence in FY2026 delivery.

• The Board remains confident in delivering full-year consensus expectations and that the Group is firmly on track to deliver against its targets.

The Business

Employing around 9,000 people, Marston's is a leading UK hospitality business with an estate of more than 1,300 pubs nationally, comprising managed, partnership ('franchised') and tenanted and leased pubs.

The Company's community pubs, either managed, franchised, or tenanted, are often more wet-led in their format or offer.

The majority of pubs are located in suburban areas.

The Company also operates a hotel business under the name Marston's Inns.

The main beers are Mansfield, Wainwright, Marston's Pedigree and EPA, McEwans Export, McEwan's Special, Bombardier, Wychwood Hobgoblin, Jennings Cumberland Ale, and Banks's Bitter and Mild.

Despite a general UK-wide decline in the popularity of mild ales, Banks's Mild still outsells its stablemate bitter in the West Midlands market and is the best-selling mild ale in the world.

Management Comment

CEO Justin Platt stated that:

“Our pubs have delivered another strong start to the year, with standout performances across our key festive trading dates including setting a new record for Christmas Day – a clear reflection of the strength of our community pubs and the passion and energy our teams bring to every service.

Like-for-like sales have remained resilient and, with 23 new pub format launches completed already in the first quarter, our accelerated rollout programme is driving further trading momentum and enhancing the guest experience.

Supported by a clear strategy, disciplined cost control and a strong programme of demand-driving events, we are excited for the opportunities ahead and remain confident in delivering market expectations for the full year.”

The Equity

There are some 660.44m shares in issue.

The larger holders include Aberforth Partners (11.2%), BlackRock Fund Advisors (3.54%), M&G Investment Management (2.37%), NFU Mutual Investment Services (2.14%), Slater Investments (1.91%), Hargreaves Lansdown Fund Managers (1.77%), Aberdeen Investment Management (1.62%), Wellcome Trust (1.48%), JP Morgan Asset Management (1.48%) and ClearBridge Investments (1.47%).

Broker Views

There are five broking firms following the company, three of whom rate the shares as a Buy, one to Outperform, whilst the fifth suggests that they are a Hold.

The consensus average Target Price for the shares is 78.75p, with the lowest call at 65p and the highest at 85p.

Analyst Anna Barnfather, at Panmure Liberum, rates the shares as a Buy, with a Target Price of 80p.

For the current year to end-September, she looks for sales of £922m (£898m), with pre-tax profits of £77.4m (£72.1m), lifting earnings to 9.0p (8.3p) per share.

The 2027 year could show £945m sales, £87.0m profits and 10.1p per share in earnings.

My View

Looking at the analyst estimates for this year and next, I consider that the shares of Marstons are undervalued at 60p and are very capable of showing an early 25% uplift in price.

It could well happen before the Interims on Tuesday, 12th May.

Looking for a 25% uplift

Accordingly, I initiate my coverage of the company by setting a 75p Target Price.

(Profile 28.01.26 @ 60p set a Target Price of 75p)