Enterprise Inns is among the leading fallers after a negative note from analysts at UBS.
The bank said the pub industry remained challenging, given that consumer spending is under pressure, input costs are rising and beer consumption is in long term decline:
Despite this, the pub industry is still struggling to reduce capacity. We therefore expect recovery to remain slow throughout this year.
On Enterprise in particular, UBS has cut its recommendation from neutral to sell, with an 85p price target:
In the near-term the company is selling assets to shore up the balance sheet and to exit what are now considered unviable pubs. While this should help stabilise the business, we are concerned that just short of 20% of the remaining licensees have been in their pub for only one year. In the longer-term we believe traditional lease profits will grow at less than the rate of inflation.
So Enterprise's shares have fallen 3.95p to 87.65p while JD Wetherspoon - where UBS has moved from buy to neutral - has lost 10.5p to 456.3p.
