Berenberg downgrades Restaurant Group, cites lack of positive catalysts

On a three-year view, the bank still expects TRG shares to perform well, as some cost pressures such as energy reverse, competitors exit the market, the consumer recovers, and the company ultimately "benefits from being a survivor".

However, in the short term, Berenberg noted that huge energy inflation has driven large earnings downgrades, meaning that the shares still do not look cheap.

"With few positive catalysts ahead, we downgrade our rating to hold," it said.

Berenberg said the company’s sales outlook is uncertain.

"While TRG blamed the heatwave and a moderation in delivery sales for the marked slowdown in like-for-like sales growth across its divisions in Q3, we have some concerns that this may also be an early indicator of a softening trend in demand, which is not currently baked into consensus," it said.

At 1020 BST, the shares were down 5.5% at 30.61p.