RBC Capital downgrades Greggs to 'sector perform' after results

(Sharecast News) - Greggs tumbled on Friday as RBC Capital Markets downgraded the shares to 'sector perform' from 'outperform' following the bakery chain's first-half results. The bank noted that Greggs reassured at the profit line for FY26 through strong cost management, a less inflationary environment and growth in grocery.

"Looking ahead though, we believe further cost savings could be harder to come by, inflation will likely necessitate further price increases, leading to continued volume weakness," it said. "Meanwhile, a slowing rollout, which may represent greater discipline, is ultimately not a good sign."

RBC said it was making small tweaks to its estimates, increasing its underlying pre-tax profit forecast by around 2% in FY26, while reducing by circa 1% in FY27, with the price target rising to 1,960p from 1,830p, justifying a downgrade to sector perform.

At 1226 BST, the shares were down 6.3% at 1,903.24p.