Jefferies upgrades Greencore after 'reassuring' update

Convenience food maker Greencore got a boost on Wednesday as Jefferies lifted its stance on the shares to ‘buy’ from hold’ and upped the price target to 150p from 106p, a day after a muted reaction to a "reassuring" first-quarter update.

Jefferies said the update was indicative of a relatively rapid recovery.

"Meanwhile, the recent capital raise and what we view as relentless determination and ambition puts GNC in a strong position to capitalise on recovery and any altered food-to-go landscape that lies beyond," it said.

Jefferies said the shares have shrugged off a Q1 update that disclosed sales in the core food to go division in January to date as down only 35%, relative to 63% in April.

"Food to go sales are now trending ahead of what our (hitherto reliable) 'Activity Monitor' would predict. This suggests that consumer behaviour is adapting in a way that is conducive to a relatively rapid return to sales normality as the vaccine rolls out," the bank said.

At 1300 GMT, the shares were up 7% at 121.10p.