After a bruising decline of nearly 50% from its peak, the Greggs (LSE: GRG) share price has quietly begun stabilising, drawing renewed interest from analysts and value investors alike.
Eleven analysts currently cover Greggs, and the broad consensus among them can best be described as cautiously optimistic about the company’s near-term prospects.
The average 12-month price target across those analysts sits at around 2,037p, with Berenberg among the most bullish at 2,170p and RBC Capital sitting at the lower end at 1,830p.
Based on where Greggs shares are trading today, those targets suggest a £5,000 investment could grow to approximately £6,636 within 12 months, representing a roughly 32.7% return.
The company’s full-year 2025 results offered some grounds for optimism, with total sales rising 6.8% to £2.15bn, supported by 121 net new store openings throughout the year.
Like-for-like sales growth of 2.4% was modest, but management attributed the softer figure to a tough consumer backdrop and an unusually hot summer that dented footfall at its locations.
Greggs is targeting 3,500 UK locations over time, up from 2,759 currently, providing a clear organic growth runway that does not depend on broader macroeconomic conditions improving significantly.
However, not every analyst is convinced a recovery is imminent, with one forecasting the stock could fall to 1,330p by next June, which would turn a £5,000 investment into just £4,050.
The bear case centres on profitability concerns, with underlying operating profit falling 4% in 2025, margins compressing from 9.7% to 8.7%, and earnings per share dropping a painful 10.7% from 137.5p to 122.8p.
Higher employment costs linked to the increase in the National Living Wage have weighed heavily on the business and are expected to remain a headwind through 2026.
UK consumer confidence also remains fragile, which could delay any meaningful return to double-digit like-for-like sales growth that investors and analysts would want to see.
The structural case for Greggs, though, remains largely intact, given its loyal customer base, ongoing store expansion programme, and a share price that has already absorbed significant punishment.
Whether the stock falls further or finds its footing will likely depend on how convincingly the business demonstrates it can manage costs while continuing to grow its store network.
For investors keeping a watchful eye on the FTSE 250, Greggs remains one of the more compelling potential recovery stories to monitor closely in the months ahead.
