Analyst Andrew Wade from Jefferies maintained a Buy rating on Greggs plc (GRG – Research Report) and keeping the price target at p3,450.00.
Andrew Wade’s rating is based on Greggs plc’s strong financial performance and strategic initiatives. The company reported a profit before tax of £190 million for FY24, surpassing market expectations and demonstrating a significant growth of 13%. This growth was supported by an 11.3% increase in total sales, with like-for-like sales rising by 5.5% and an improvement in gross margin by 100 basis points. Additionally, Greggs has made progress in key areas such as increasing evening sales and app usage, which are expected to contribute to future growth.
Despite a slight slowdown in like-for-like sales due to adverse weather conditions, Greggs remains optimistic about continued progress in FY25. The company has also communicated that its planned infrastructure investments will temporarily impact operating margins in FY26 and FY27. However, these investments are seen as a strategic move to support long-term growth, and the temporary margin pressure does not deter the positive outlook for the company’s future profitability. Therefore, Andrew Wade has given a Buy rating, reflecting confidence in Greggs plc’s ability to sustain growth and overcome short-term challenges.