Greggs’ (LSE:GRG) shares have had a rough couple of years. Since 2025, the price has slid from around 2,800p to just over 1,600p today.
That drop reflects a mix of weaker consumer confidence, rising costs and possible over-expansion just as the UK economy cooled.
Even so, when I look at the broker research, most of the professionals are not throwing in the towel. They’re broadly cautious, but still leaning towards recovery rather than permanent decline.
So what exactly are they seeing that the market might be missing?
What the brokers are banking on
Across the 15 analysts I reviewed, I found seven Buy ratings, five Hold and four Sell, which adds up to a Neutral consensus. Their average 12‑month price target is 1,700p, only about 6% above the current level.
In short, nobody expects fireworks — but does that mean Greggs is a lost cause? Not so fast.
Some big names remain bullish on the long-term recovery of the company. JP Morgan, Barclays and UBS have all recently reiterated positive views, with 12‑month targets in a band of roughly 1,910p to 2,200p.
JP Morgan, in particular, called it a “structural winner”, pointing to strong unit economics and high sales per square foot. It noted that the share price decline is excessive, considering earnings forecasts have only slipped modestly.
The bank expects earnings and free cash flow to improve from here as new stores and increased distribution equates to profits.
RBC Capital also appears unperturbed by the price, giving it an Outperform rating. It envisions roughly 11% organic growth a year going forward, supported by the seven‑year expansion plan and potential for more cash returns as costs ease.
But all those lofty expectations are reliant on the assumption that sales and margins improve from here. What happens if they don’t?
Where the bears see trouble
On the risk side, weaker consumer demand is the obvious headache. Management has described the outlook for 2026 as “cautious but hopeful”, with pressure from higher living costs. If customers keep trading down or cutting back, it could be harder for Greggs to recover the money already spent on new stores.
There’s also a newer structural concern: weight‑loss drugs. Jefferies recently cut its rating from Buy to Hold and dropped its target from 2,500p to 1,610p. It fears that the rising popularity of GLP‑1 medicines will hurt sales of bakeries like Greggs, impacting medium‑term growth.
Chief executive Roisin Currie has said there is “no doubt” appetite‑suppressing medication is affecting the business, with more customers seeking smaller portions and healthier options.
So Greggs is adapting its menu, but it’s still not clear how far this trend will run.
Is the wait worth it?
For long‑term investors, there’s some appeal in the low price. Plus, the 4.3% yield adds value even if the price remains flat. After all, it’s a good brand with strong store economics and a price trading 57% below estimated fair value.
But if earnings don’t recover soon, the price could fall further.
At today’s valuation, the market seems to be pricing in a slow, grinding comeback rather than a quick bounce. So the real question is whether it’s worthwhile tying up capital for a potential recovery that could take years.
I’ll hold my shares for now, but I won’t consider buying more today. In my opinion, there are better income opportunities on the UK market currently.
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Mark Hartley owns shares in Greggs.
