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Tuesday, December 01, 2015
Connor Campbell - Market Analyst at Spreadex

Stock of the day 01/12/2015 – Greene King PLC

However, things have begun to look up in the past fortnight; can the stock continue to inspire investors’ good cheer with its half year results on Wednesday?

A rather dire decline in 2014 was quickly mitigated in the first quarter of 2015, with Greene King surging from £7.41 to a year (and 11 month) peak of £8.91 between January and the start of March. However, the stock couldn’t sustain this price and, after dipping below £8 on the eve of the UK election, was trading around £8.20 towards the end of June.

Greene King PLC Chart December 2015
(Source: 01/12/2015)

Greene King received a boost on June 23rd, however, as it completed its £774 million takeover of the Spirit Pub Company, sending the stock back to the £8.50s, the CMA stating a meagre 16 locations, of the combined 3100 plus pubs owned by the two companies, had to be sold. The good news (sort of) continued a week later, as Greene King announced a 3% rise in full year sales to £1.32 billion alongside a 2.7% decline in pre-tax profit to £168.5 million.

After hovering between £8.45 and £8.65 throughout July and the majority of August Greene King then fell below £8 once again as the global markets took a tumble, before a start of September trading statement (containing a 1.3% rise in like-for-like sales for the 18 weeks to 6th September) dragged it back to £8.40.

Yet this recovery was quickly nipped in the bud, and a drop that began in the second half of September soon culminated in Greene King hitting a 9 month low of £7.71 in the middle of October, something it almost matched a month later. However, in the company’s latest twist, a series of positive broker upgrades, including a ‘Buy’ from Deutsche Bank, lifted the stock in the second half of November, leaving Greene King at a current trading price of £8.53 (, 01/12/2015).

In terms of its half year figures on Wednesday, Greene King is expected to post revenue of £1 billion (compared to £700 million in the second half of its last fiscal year), with analysts forecasting a big boost brought on by the acquisition of the Spirit Pub Company.

Greene King PLC has a consensus rating of ‘Buy’ with an average target price of £9.64.

Recent Posts:
Morning Market Comment 01/12/2015
Evening Market Comment 30/11/2015
Afternoon Market Comment 30/11/2015
Stock of the day 30/11/2015 - The Berkeley Group Holdings PLC
Weekend Paper Roundup 30/11/2015


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