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Judging by the readership numbers we Idiot writers see, many traders are extremely all in favour of Greggs (LSE: GRG) shares and their actions. Even so, apologies for the brutal pun in my headline, which I merely couldn’t resist!
Alas, the Greggs share value has collapsed like a soggy soufflé for the reason that large surge of summer season 2024. This long-established enterprise — constructed on an increasing property and robust gross sales development — is now struggling to develop. What would possibly flip this tanker round?
Greggs shares slide
At its all-time excessive, this FTSE 250 inventory peaked at 3,443p on 30 December 2021. It then zigzagged for years, earlier than rising to hit 3,250p in September 2024. Nevertheless, it’s been just about all downhill since, with the inventory bottoming out at 1,407.2p on 25 November 2025.
As a price investor, I search under-priced shares in respectable firms. Greggs shares appeared on my radar on 1 July, after they slumped by 15%, down 300p that day. I pounced, shopping for a stake (however not a Steak Bake) for 1,696.7p a share.
Greggs’ challenges
In 2024/25, Greggs’ enterprise mannequin confronted a variety of setbacks. First, the fast uptake of GLP-1 weight-loss medicine within the UK diminished demand for reasonable, filling ‘meals on the go’. Second, its retailer rollout slowed down, with round 2,650 energetic retailers. Third, the cost-of-living disaster has left British buyers with much less cash to spend.
As well as, Greggs prices are hovering. This follows steep will increase within the Nationwide Minimal Wage, increased employer Nationwide Insurance coverage contributions, and hovering power payments. Briefly, this Newcastle-based bakery chain’s income and margins are being squeezed exhausting.
Will the nice occasions (sausage) roll?
As I write, the Greggs share value stands at 1,653p, valuing this group at £1.7bn. The shares commerce on 13.9 occasions trailing earnings, delivering an earnings yield of seven.2%. Because of this the market-beating dividend yield of almost 4.2% a 12 months is roofed over 1.7 occasions by historic earnings.
These resemble the basics of a traditional worth inventory. However additional company weak spot would possibly flip this potential restoration play into a price entice. Even so, with Greggs shares buying and selling at ranges first seen seven years in the past, I’ve no intention of promoting our holding.
Then once more, it’s price noting that Greggs is probably the most shorted inventory within the London inventory market. Over 14.5% of the shares have been borrowed and offered, usually by skilled traders (corresponding to hedge funds) betting they’ll fall.
Lastly, with Greggs’ income anticipated to be flat this 12 months, I’m not anticipating miracles from this inventory. My fundamental concern could be if the group cuts its tasty dividend to shareholders. In the meantime, I await the subsequent buying and selling replace on 12 Could…
