Marston's Broadly in-line H1; On track to achieve FY 26 targets

Research evidence excerpt

Marston's Broadly in-line H1; On track to achieve FY 26 targets

Karan Puri AC Europe Equity Research

(44-20) 7742-8342 12 May 2026 C A Z E N O V E

karan.puri@jpmorgan.com

Investment Thesis, Valuation and Risks

Marston's (Overweight; Price Target: 81p)

Investment Thesis

We view the MARS equity story as appealing, given its: 1) progressive margin improvement

expected in the forward-looking periods (helped by various revenue and cost-mitigation

initiatives, underpinned by ongoing digital transformation and growing franchise

exposure); 2) ongoing investment in creating five differentiated pub formats, which should

help it target a larger customer base, hence driving market share gains; 3) defensiveness on

the back of its affordable, suburban and wet-led offering; and 4) attractive valuation.

Separately, we see leverage concerns as overdone, particularly in the context of its long-

dated maturities, manageable maintenance covenants, and interest rate hedges, with

improving operational performance and accelerated disposal of non-core assets (linked to

the business simplification, the most recent being the CMBC sale) expected to drive further

de-leveraging.

Hence, we rate the shares OW.

Valuation

Our Dec-27 price target of 81p applies a target multiple of 7.4x, 20% below the pre-COVID

five-year average (vs MAB/YNGA 10%/25% respectively), given its now lower exposure

to the tenanted and leased model (higher margin and typically more defensive given the

steady rental income component), UK macro-related uncertainty, and structurally lower

margins post COVID.

Risk to Rating and Price Target

Downside risks:

• Slower-than-expected de-leveraging could bode negatively for shares

• MARS’ relatively large exposure to retail shareholders (in the context of no dividends)