Greencore tumbles on Jefferies downgrade

The bank pointed to weak sandwich market data and said it is now more than 30% below consensus on Greencore’s FY20. This is "still too optimistic for an operationally-geared business, seeing big negative sales impacts," it said.

"With the shares now more than 50% above their post-Covid trough (but still 30% below pre-Covid levels) we move to the sidelines, ahead of the first-half results on 19 May."

Jefferies said Greencore has the leadership and balance sheet to come through this but "a period of uncertainty beckons".

When it downgraded estimates in March to account for the Covid-19 outbreak, it expected a short, sharp, shock that the balance sheet would be big enough to take.

"Now, with more insight post-lockdown, we anticipate a deeper and longer shock - one that the balance sheet is still big enough to take, but which is likely to require a more fundamental re-positioning and adjustment of expectations.

"We expect a different GNC to emerge from all this, but only after a period of lowered visibility, associated costs of change and consensus readjustment."

At 1030 BST, the shares were down 11.1% at 149.50p.