Deutsche Bank starts coverage of Domino's, Greggs, Restaurant Group

The bank said the UK restaurant sector seemed poised for a recovery post Covid, and the bigger players should benefit from capacity taken out during the pandemic.

"Most operators are looking to grow their store network; however, the outlook remains clouded near term with UK consumer spend set to come under pressure," it said. "We expect the impact to be unequal among sub-sectors, with casual dining more impacted than affordable treats.

"We remain selective, preferring defensive business models," DB said, adding that valuations should also gain focus in determining trough levels.

The bank set a price target of 355p for Domino’s, 1,950p for Greggs and 47p for Restaurant Group.