Greggs PLC (LSE:GRG) shares bounced further away from five-year lows seen last month as a quarterly update encouraged analysts and investors with news that after a very difficult July, August and September were better.
The shares warmed up 7% to 1,721p on Wednesday lunchtime.
Panmure Liberum observed that despite easier comparatives and new menu items like pulled pork sandwiches and a Big Deal £5 meal offer, "we suspect underlying volumes remain firmly negative".
The US bank's analysts said the company’s ability to maintain guidance was encouraging "after a disappointing summer", but highlighted that "the cut to store openings is likely to add weight to the 'peak Greggs' narrative, even if it is not one to which we subscribe.”
Greggs now expects around 120 net store openings this year, down from its prior target of 140-160.
Peel Hunt flagged the volume concern too, noting that the fall in LFL from 2.6% in the first half to 1.5% in Q3 “implies volume losses as Greggs has been easing prices higher.”
"However, some cost pressures have become slightly more manageable, and headline profit guidance is unchanged.
"There is a sizeable short position in the shares and, while this is a middling statement, the shares may be relieved it was not worse.
"That said, we have strategic concerns", leading the broker to maintain its 'hold' recommendation.
Consensus profit before tax for 2025 remains at £176 million, although Panmure Liberum warned delivery would “hinge on a solid Q4 LfL outcome, which looks achievable given the easier two-year comparative.”
Jefferies retained its 'buy' rating, calling Greggs a "high quality proposition on a decade low multiple".