Grrencore Group - food market leader's mega-acquisition is looking very good, Q4 Update will show shares are under-appreciated, at least 25% upside
Mark Watson-Mitchell - 07.10.2026
Next Tuesday, 13th October, the £1.95bn-capitalised Greencore Group (LON:GNC) will be informing the market with its Q4 Trading Update and also about its integration progress and delivery following the massive Bakkavor acquisition that was completed in January this year.
In February 2025, Greencore made its first offer for the Bakkavor Group with a view that the enlarged group would create a leading UK convenience food business with a combined revenue of around £4bn, with a diverse product offering, strong commercial relationships and market-leading capabilities in attractive segments across the UK convenience food landscape.
A year later, at the beginning of February 2026, the Group’s shares peaked at 306.50p, since when they drifted off to a 191p Low in early June.
Now trading at around the 244p level, I believe that the shares of the Greencore Group offer some very appealing upside, with over 300p being an easy price objective.
The Business
Greencore was established in 1991 following the privatisation of Irish Sugar.
In 2001, the business diversified into convenience food through the acquisition of Hazlewood Foods.
Subsequently, the business has made a series of acquisitions and disposals to create Greencore’s current portfolio.
In January 2026 Greencore completed the acquisition of Bakkavor Group plc.
Today Greencore is the UK's leading fresh convenience food manufacturer.
Headquartered in Dublin, Ireland, the combined entity generated approximately £4bn in pro forma revenue in FY25 and employs around 28,000 people.
It brings industry-leading innovation to create high-quality, fresh and convenient food for customers and consumers.
The Group supplies all major UK supermarkets, convenience and travel retail outlets, discounters, coffee shops, foodservice providers, and other retailers.
Its portfolio spans products across all meal occasions, including ‘Food for Now’ categories such as sandwiches, salads, sushi and ‘Food for Later’ categories such as ready meals, pizza, breads and desserts.
In addition, its US operations produce fresh meals, breads, dips soups, sauces and burritos out of manufacturing facilities in California, Texas and North Carolina.
Third Quarter Trading Update
On Wednesday, 22nd July, the Group issued its Trading Update for the 13 weeks to 26th June.
Greencore delivered a strong operational and financial performance in Q3 with volume growth ahead of the market, excellent underlying profit momentum, a fast start on synergy delivery and positive cashflow generation.
As a result, Greencore upgraded its FY26 Adjusted Operating Profit guidance.
The majority of the upgrade was driven by the underlying trading performance of the enlarged business.
Approximately 50% of the annual run-rate cost synergies are expected to be realised by January 2027, with 85% by January 2028 and 100% by January 2029.
Management Comment
CEO Dalton Philips stated that:
"The Greencore team has delivered another strong performance in Q3, with volume growing ahead of the market and excellent underlying profit growth, even against a robust Q3 last year.
We continue to deliver for our customers, supporting them through the busy summer period and helping them drive growth through product innovation.
Greencore has never been stronger, and I'm really encouraged by what the enlarged business is starting to achieve.
Customers want to grow their business with us, our integration is fully on track, and we have made a fast start on synergy delivery.
We now expect FY26 Adjusted Operating Profit for continuing operations to be above current market expectations in the range £234-242m.”
Outlook
The Group has stated that its Q4 trading had started positively, with strong volume momentum continuing from the latter half of Q3.
This will be further supported by early success from cross-selling opportunities, with the first combined new business win launched in desserts in August.
The Management remains confident in its ability to drive value from the Bakkavor acquisition and expect in-year cost synergy delivery of c.£15m in FY26.
It continues to expect to deliver at least £80m in annual cost synergies.
The enlarged Group is looking towards the potential sale of its US business - which has been treated as a discontinued operation and held for sale asset.
The US business continues to trade positively and in line with expectations, perhaps next week we will get a further update.
The Equity
There are some 811.18m shares in issue.
The larger holders include Umbriel Ventures Ltd. (10.29%), LongRange Capital LLC (4.97%), JPMorgan Asset Management (UK) Ltd. (2.99%), Brandes Investment Partners LP (2.80%), Dimensional Fund Advisors LP (1.88%), Polaris Capital Management LLC (1.78%), BNP Paribas SA (Private Banking) (1.73%), Alfred Berg Kapitalforvaltning AS (1.43%), Driehaus Capital Management LLC (1.36%), and Barclays Investment Solutions Ltd. (1.12%).
Broker Views
There are at least nine brokers following the group, the analyst consensus suggests that the average Target Price is 325p, with the Lowest call at 265p, and the Highest being 360p.
Consensus average estimates suggest that for 2026 revenues will increase to £3.375.2bn, with adjusted operating profit of £237.99m, on a margin of 7.1%, with 19.7p earnings per share.
For the 2027 year, they look for £4,097.7m revenues, £309.79m profits, 7.6% margin and 23.8p per share in earnings.
The 2028 consensus estimate is for £4,232.8m sales, £341.67m profit, a margin of 8.1% and 27.4p earnings per share.
Over the three years, net debt is expected to ease from £744.4m in 2026 to £628.7m next year and £469.7m in 2028.
Berenberg Bank has a Buy on the Group with a 351p Target Price.
RBC Capital Markets, also has a Buy, 345p TP, while Deutsche has a 325p TP.
My View
I like Greencore and consider that it may well have pulled off a ‘blinder’ with its takeover of Bakkavor – the expansion of its whole grouping together with the massive cost-saving synergies has produced a giant.
At the current 244p, the shares trade on a mere 12.3 times current year earnings, just 10.2 times prospective and a mere 8.9 times the 2028 estimates – I see 300p very soon!
(Profile 30.01.25 @ 183p set a Target Price of 228p*)
(Profile 15.05.25 @ 201p set a Target Price of 235p*)
(Profile 18.11.25 @ 233p set a Target Price of 260p*)
(Profile 26.05.26 @ 241p set a Target Price of 306p*)
(Profile 07.10.26 @ 244p set a Target Price of 300p)
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