Risk Reward Update

Research evidence excerpt

Risk Reward Update

UpdateM

RiskRisk RewardReward– JD Wetherspoon- JD Wetherspoon(JDW.L) (JDW.L)

Risk/reward balanced

PRICE TARGET 650p EQUAL-WEIGHT THESIS

Our price target of 650p assumes 15x P/E and 8x EV/EBITDA FY27e, 10% discounts to the ▪Well located, large pubs with a strong

stock's 5Y NTM pre-Covid average of 17x/9x, reflecting uncertainty around the broader value-for-money proposition, a wide product

macroeconomic environment and cost pressures. range, a strong customer following and a

track record of innovation, all helping drive 684p

continuous LfL sales outperformance

Consensus Price Target Distribution 460.00p 860.00p well invested, freehold-skewed estate, MS PT ▪A

attractively positioned to take share in anSource: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates

industry in structural decline, estate starting

to expand after a decade of shrinkage

▪Strong FCF conversion and a track record

RISK REWARD CHART of opportunistic share repurchases

▪Margins are in the mid-single digits,

GBp creating high operational gearing

1,090p1,090p(+44.56%)1,090p(+44.56%)(+44.56%) ▪Ongoing cost inflation and weak UK macro

outlook create top line and margin risk

Consensus Rating Distribution

750 754p754p754p 30% Overweight

650p650p(-13.79%)650p(-13.79%)(-13.79%) 40% Equal-weight

30% Underweight

MS Rating

Source: Refinitiv, Morgan Stanley Research

250 360p360p(-52.25%)360p(-52.25%)(-52.25%)

JUL '25 JAN '26 JUL '26 JUL '27

Key: Historical Stock Performance Current Stock Price Price Target

BULL CASE 1,090p BASE CASE 650p BEAR CASE 360p

Re-rating in line with pre-Covid levels Solid LfL growth and steady margin Shares de-rate on weaker revenue/profit

recovery outlook

Sustained strong sales growth and profit

recovery.