J D Wetherspoon shares jumped 3% on Wednesday after HSBC upgraded the pub retailer to Buy from Hold.

HSBC analyst Joseph Thomas upgraded Wetherspoon to Buy and initiated a 940p price target on the firm. Thomas stated that the UK pub and restaurant sector has defied the firms concerns with strong trading and an improved cost outlook.

Despite the recent rally that has seen Wetherspoon shares up over 60% in the last three months, Thomas still values the group as cheap.

Its shares remain well below its prior heights shown in 2021 and 2019, but recent inflation issues have caused issues to the retail sector.

Recent results showcase a resilient performance from Wetherspoon, with like-for-like sales up 9.1% in Q3 and sales across Easter reaching the highest levels for the company. As a result, the group anticipates profits to be towards the top of market expectations.

Fellow pub retailer Mitchells & Butlers was also upgraded at HSBC to a Buy rating from Hold with a 300p price target.