Berenberg significantly hikes target price on Greggs

Berenberg, which also reiterated its 'buy' rating on the stock, acknowledged that Greggs shares had rallied "strongly" over the last six months. However, it still thinks that the strength of Greggs' recovery "more than warranted" the moves.

While the German bank admitted Greggs' shares were not necessarily "cheap", it also said delivery, in particular, could prove "hugely incremental" to the firm's "recovered" sales and could drive "significant upside" to its forecasts.

"Greggs currently trades at 23.7x 2022E P/E. We would note that it has a net cash position and an exceptional track record of earnings growth, which should support that multiple," said Berenberg, which also transferred coverage of the stock to Owen Shirley.