logo-loader

UBS hikes its target price and 2019 estimates for Greggs following tasty Christmas trading update

Published: 08:25 09 Jan 2019 EST

Greggs sign
UBS analysts also increased their 2019 like-for-like sales growth forecasts for Greggs to 3.0% from 2.8% to reflect strong current trading

UBS has hiked its target price for Greggs PLC (LON:GRG) on Wednesday after raising its 2019 sales and earnings estimates for the pasties to sausage rolls retailer following a strong Christmas trading update which led the group to up its full-year 2018 profit guidance once again.

The Swiss bank raised its discounted cashflow-based target price for the FTSE 250-listed firm to 1,500p, up from 1,400p previously, with the stock trading at 1,453p, up 5.3% on Tuesday’s closing price.

READ: Greggs lifts profit guidance again as festive bakes and mince pies boost Christmas trading

In a note to clients, UBS’s analysts noted that Greggs delivered strong fourth quarter trading, with like-for-like sales growth of 5.1% and a total sales rise of 7.2%, leading the firm to raise its full-year 2018 underlying pre-tax profit guidance to at least £88mmln versus the at least £86mln figure it hiked it to in the November upgrade.

They said: “We believe that this result highlights the current momentum in the Greggs business, which looks to be taking market share with growth driven by a healthy mix of footfall and basket size growth.”

The analysts increased their 2019 like-for-like sales growth forecasts for Greggs to 3.0% from 2.8% to reflect strong current trading in combination with the softer comparatives expected through the first half.

They also upgraded their earnings per share estimate for the bakery products retailer by 4% for full-year 2019 and forecast underlying earnings (EBIT) of £95mln and a flat year-on-year EBIT margin.

Repeating a ‘buy’ rating on Greggs shares, the analysts concluded: “We continue to believe that one of the underappreciated aspects of the investment case is the improving quality of the estate driven by the net openings program.”

Coniagas Battery Metals secures new key ground with focus on...

Coniagas Battery Metals (TSX-V:COS) CEO Frank Basa joined Steve Darling from Proactive to announce the company's strategic acquisition of key ground near SOQUEM’s Cardinal Property, located 80 km southeast of Chibougamau, Quebec. This acquisition underscores Coniagas’ commitment to capitalizing...

44 minutes ago