Deutsche Bank has issued a sell recommendation on Greggs PLC (LSE:GRG), citing concerns over slowing like-for-like sales growth and pressure on profit margins.
The bakery chain’s latest results showed underlying profit before tax of £190m for 2024, up 13% and slightly ahead of consensus expectations.
However, Deutsche pointed to a deceleration in sales growth at company-managed shops, which slowed from 2.5% in the final quarter of 2024 to 1.7% in the first nine weeks of 2025.
Greggs attributed the weaker start to the year to poor weather conditions in January, with trading improving in February.
However, the German bank warned that the company’s profit margins could remain under pressure, despite continued expansion.
The food retailer opened a net 145 stores during the year, bringing its total estate to 2,618 shops. It is also pushing ahead with initiatives such as evening trade, which now accounts for 9% of company-managed shop sales, up from 8.5% in 2023.
While Greggs continues to expand its delivery network and grow its digital presence, Deutsche remains cautious on the stock, setting a price target of 2,000p, above its current price of 1,864p (down 2%). The stock has tumbled 40% in the last six months.