The newsagents chain is expected to widen the product range in travel stores, with more pharmacy and tech, while average transaction value and gross margin should rise.
The segment is expected to see around 70-80% of last year’s performance by 2023, with US arms Marshalls and InMotion potentially leading momentum.
High street profits are underpinned by lower rents, as the business managed to protect earnings for years despite negative sales, a trend the broker expects to continue.
Meanwhile, analysts noted that the market has overlooked the value of Funky Pigeon, which could be worth up to GBP250mln.
“The biggest and swiftest recovery will come, we believe, on the high street, but that it will take longer for the travel business to get back to normal,” Peel Hunt said.
“However, earnings per share (EPS) progression should be strong, and if pushed, we would say that financial year 2024 will be another strong year of growth, and that group EPS could better than seen in financial year 2019 (115p) in that year.”
Shares added 1% to 1,578p on Wednesday morning, still 40% below January levels though up 125% the March trough.