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2026 has been an excellent yr should you personal Greggs (LSE: GRG) shares. The inventory has rocketed 31% increased to 2,108p on the market shut on Friday (9 October) and is seemingly again in vogue having been underneath immense stress in latest instances.
One dealer lately reiterated its worth goal for the inventory at 2,300p. I wished to dissect the latest features and analyse whether or not we’ll see the inventory attain that stage within the subsequent 12 months.
What’s behind the latest features?
A powerful interim outcomes launch on 29 July was an enormous catalyst for the latest features. Shares within the firm jumped after it introduced a 19.7% improve in pre-tax revenue to £76m and a 7.2% improve in complete gross sales to £1.1bn.
Positively for shareholders, the corporate’s technique appears to be paying off with gross sales boosted by:
- Menu improvements
- Store growth
- Different retail environments
The corporate’s inventory worth jumped 30% within the final week of July and has managed to increase these features additional in latest months.
However sturdy latest buying and selling apart, there’s one other large issue that I feel is supporting the corporate’s valuation proper now.
Scaring off the brief sellers?
Let’s rewind to March 2026. The inventory was the second-most-shorted within the UK. Brief sellers primarily revenue when a selected firm’s share worth falls, as they’ll promote excessive and purchase low earlier than delivering their borrowed shares again to the unique investor.
Following the latest share worth surge, the inventory is now sitting fifteenth within the UK’s most-shorted checklist. That dramatic discount in brief positions has helped cut back the downward stress on the inventory, however truly supplies help as brief sellers have to purchase shares to cowl their potential losses.
Greggs is combating again after a sluggish interval and an enchancment in gross sales progress may immediate brief sellers to rethink their positioning.
Dan Coatsworth, AJ Bell, 1 October 2026
Can the inventory hit 2,300p?
It’s not simply me that’s optimistic on the inventory. Analysts from Berenberg Financial institution launched an up to date report on 2 October reiterating their Purchase ranking with a worth goal of two,300p.
That may indicate an additional 9.1% achieve from the present share worth. Given the present price-to-earnings (P/E) ratio of 16.4, assuming earnings remained unchanged, at 2,300p this could prolong to round 18. That doesn’t appear extreme for a robust dividend share, and we may effectively see earnings per share climb on the again of the upgraded full-year outcomes.
My verdict
The inventory has recovered strongly over the previous six months and the corporate now boasts a market cap of £2.2bn. There are at all times dangers to earnings, notably if we see a drop in shopper spending over the subsequent yr or so or a slowdown in momentum with the turnaround technique.
Nevertheless, administration has carried out effectively to regular the ship strategically and cut back the near-term stress from brief sellers. I feel on the present valuation it’s price contemplating for buyers attempting to find a mixture of revenue and progress from a Footsie mainstay.
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Ken Corridor doesn’t personal shares in any of the businesses talked about.
