Greggs’ (LSE:GRG) shares have had a tough couple of years. Since 2025, the worth has slid from round 2,800p to simply over 1,600p at present.
That drop displays a mixture of weaker shopper confidence, rising prices and doable over-expansion simply because the UK economic system cooled.
Even so, after I have a look at the dealer analysis, many of the professionals should not dropping out. They’re broadly cautious, however nonetheless leaning in direction of restoration moderately than everlasting decline.
So what precisely are they seeing that the market could be lacking?
What the brokers are banking on
Throughout the 15 analysts I reviewed, I discovered seven Purchase scores, 5 Maintain and 4 Promote, which provides as much as a Impartial consensus. Their common 12‑month value goal is 1,700p, solely about 6% above the present degree.
In brief, no person expects fireworks — however does that imply Greggs is a misplaced trigger? Not so quick.
Some large names stay bullish on the long-term restoration of the corporate. JP Morgan, Barclays and UBS have all not too long ago reiterated constructive views, with 12‑month targets in a band of roughly 1,910p to 2,200p.
JP Morgan, particularly, referred to as it a “structural winner”, pointing to sturdy unit economics and excessive gross sales per sq. foot. It famous that the share value decline is extreme, contemplating earnings forecasts have solely slipped modestly.
The financial institution expects earnings and free money movement to enhance from right here as new shops and elevated distribution equates to income.
RBC Capital additionally seems unperturbed by the worth, giving it an Outperform ranking. It envisions roughly 11% natural development a yr going ahead, supported by the seven‑yr enlargement plan and potential for more money returns as prices ease.
However all these lofty expectations are reliant on the idea that gross sales and margins enhance from right here. What occurs in the event that they don’t?
The place the bears see hassle
On the chance facet, weaker shopper demand is the plain headache. Administration has described the outlook for 2026 as “cautious however hopeful”, with strain from greater dwelling prices. If prospects maintain buying and selling down or chopping again, it may very well be tougher for Greggs to get better the cash already spent on new shops.
There’s additionally a more moderen structural concern: weight‑loss medicine. Jefferies not too long ago lower its ranking from Purchase to Maintain and dropped its goal from 2,500p to 1,610p. It fears that the rising recognition of GLP‑1 medicines will damage gross sales of bakeries like Greggs, impacting medium‑time period development.
Chief govt Roisin Currie has mentioned there may be “little doubt” urge for food‑suppressing treatment is affecting the enterprise, with extra prospects searching for smaller parts and more healthy choices.
So Greggs is adapting its menu, however it’s nonetheless not clear how far this pattern will run.
Is the wait price it?
For lengthy‑time period buyers, there’s some enchantment within the low value. Plus, the 4.3% yield provides worth even when the worth stays flat. In spite of everything, it’s a superb model with sturdy retailer economics and a value buying and selling 57% beneath estimated honest worth.
But when earnings don’t get better quickly, the worth might fall additional.
At at present’s valuation, the market appears to be pricing in a sluggish, grinding comeback moderately than a fast bounce. So the actual query is whether or not it’s worthwhile tying up capital for a possible restoration that might take years.
I’ll maintain my shares for now, however I received’t contemplate shopping for extra at present. In my view, there are higher earnings alternatives on the UK market at present.
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Mark Hartley owns shares in Greggs.
