Morgan Stanley gives Greene King the 'Greene light'

Analysts at Morgan Stanley took a look at pub group Greene King on Friday, saying the firm's decision to support its dividend meant it was time to "Greene light" an upgrade for the brewer and landlord's shares.

Morgan Stanley upgraded to 'overweight' from 'equal-weight' and upped its price target to 640p from 610p.

Analysts pointed out that, while the outlook for UK pubs and restaurants was "set to remain tough", it felt that Green King's like-for-like sales underperformance would begin to narrow in its next financial year.

New analysis of the pub group's debt securitisations suggested that its dividend would be "secure moving forward".

With a dividend yield of 7% close to a price/earnings ratio of 8x, "a lot of bad news is priced in," the analysts noted.

Greene King had been preyed on by short sellers hoping for a repeat of 2016 when the firm's share price fell 20% as traditional drinking holes continued to see sales dented in the wake of the 2007 smoking ban.