Broker tips: Greggs, Wizz Air, Croda
By Iain Gilbert
Date: Wednesday 30 Jul 2025
(Sharecast News) - Analysts at Berenberg slightly raised their target price on bakery chain Greggs from 3,040.00p to 3,060.00p on Wednesday, noting that the group's "fresh strategy announcements add flavour".
Greggs reported positive strategic progression on Tuesday, in Berenberg's view, noting that while like-for-like and total revenues were pre-reported in an update earlier in July, profitability outcomes had not been. Management reported group adjusted pre-tax profits of £63.5m, which reflected a 3% beat versus consensus estimates.
Despite this, Berenberg noted that Greggs' shares traded roughly 5% lower on insignificant trading news, leading to a further deterioration in what it said was a share price that already reflected "subdued sentiment".
"We continue to think that the fundamentals of the equity story are detached from the current valuation multiple, which seems to infer imminent store estate saturation without sufficient cause, in our view," said the German bank. "We have made insignificant changes to our earnings forecasts. We have increased our FY 2026E adjusted operating profit expectation marginally, to reflect the reversion of the hot weather impact to June 2025, and have tweaked our net interest and tax charge forecasts to reflect H1 outcomes and guidance commentary."
Berenberg, which reiterated its 'buy' rating on the stock, added that Greggs currently trades on a 12.5x 12-month forward price-to-earnings ratio, more than one standard deviation below its trailing three-year historical average.
Deutsche Bank upgraded Wizz Air on Wednesday to 'buy' from 'hold', keeping its price target on the stock at 1,500.00p.
DB said that circumstances - many outside the company's control - have forced Wizz to have a rethink.
"On top of the suspension of Abu Dhabi operations and decision to realign the strategy and focus on core markets, with the results last Thursday Wizz divulged that it will: (i) slow its growth ambition from 15-20% per annum to 10-12% over the next circa 3 years; (ii) only take 10-15 XLRs versus the 47 on order, converting the balance to A321neos where a more deferred delivery timetable out to 2032 is envisaged; (iii) aim to have zero aircraft grounded due to GTF engine issues by mid-2027," DB said.
JPMorgan Cazenove upgraded Croda International on Wednesday to 'overweight' from 'neutral' following a 10% slump in its share price following results a day earlier.
The bank noted that despite an in-line first-half print and no change to the FY25 guidance - both a rarity in the sector - Croda shares ended down 10% versus the sector down 1%.
It said increased competitive environment in the legacy consumer business of Croda was something that it has discussed repeatedly in its past research, and that this was indeed one of the key reasons for its cautious view on the stock previously.
"That said, over the past 18 months, the company has regained more volumes than we would have expected through modest tactical price cuts, albeit from very high levels in 2022, with the majority of these price declines reflecting the pass-through of lower raw material prices," JPM said.
So while there are some question marks, JPM said the market's pessimism on fundamentals seems excessive and also said that valuation now appears more compelling.
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