In a note on Friday, the broker raised their target for the bakery chain to 2,950p from 2,100p and reiterated their ‘buy’ rating, saying they expected the company to “soon move back into positive territory” regarding sales growth as pandemic lockdown restrictions were removed.
Meanwhile, Berenberg noted that despite only launching a delivery option at the start of 2020, there could be “further growth” the segment over the next couple of years as the firm straddled multiple delivery service aggregators such as Just Eat Takeaway.com NV (LON:JET) and Deliveroo PLC (LON:ROO).
The broker also said Greggs now has ambitions to create an evening offering through a multi-prong strategy of later opening, more products and “creating powerful deals”, which they said could “surprise positively in the years ahead” and replicate similar success achieved by its breakfast offering.
“While we do think that the market is starting to wake up to the delivery opportunity, recognition of the potential for growth in the evening day-part is still very low”, Berenberg added.
Greggs shares jumped 2.1% to 2,573p in early afternoon trading.