Deutsche Bank has reiterated a Sell rating on Greggs (LSE:GRG), the bakery chain, with a 1,330p price target that implies significant downside from the shares' last close of 1,560p.
Analyst Tim Barrett argues that first-half strength will not carry through the year, with management aiming to recover the £10m pre-tax profit shortfall seen between the first half of 2024 and the first half of 2025, "or possibly a little more".
That guidance implies roughly 16% pre-tax profit growth in the first half of 2026 but a decline of more than 10% in the second half, a reversal Barrett says is explained by depreciation starting on the new Derby manufacturing facility and cost efficiencies annualising in the autumn.
He describes the outlook for input costs as broadly balanced, with dairy prices falling against rising coffee and wheat, and does not expect full-year consensus to shift at this stage of the year.
