JPMorgan and RBC Capital have taken opposing positions on Greggs (LSE:GRG), sparking a fresh debate over the bakery chain’s valuation and growth prospects.
JPMorgan recently lifted its price target on Greggs to 2,210 GBp from 2,050 GBp, placing it toward the upper end of the current analyst range.
The higher JPMorgan target reflects confidence that Greggs can sustain a premium valuation if it continues executing on its operational plans and maintains its core business model.
RBC Capital took a more cautious stance, downgrading Greggs to Sector Perform from Outperform and setting a price target of 1,960 GBp.
RBC cited concerns that additional cost savings may be harder to achieve from here, suggesting the efficiency gains that previously supported optimism are becoming more difficult to replicate.
The bank also pointed to the recent share price rally as a reason for greater caution, arguing the risk and reward profile has grown less attractive if execution stumbles.
Analyst targets are now clustering around £19.60 and £22.10 per share, reflecting a genuine split in how much upside the market believes remains after the recent run-up.
Against this backdrop, the estimated fair value for Greggs has edged higher, moving from approximately £17.01 to roughly £17.77 per share.
Several underlying model inputs shifted alongside that fair value revision, including the net profit margin moving from about 5.42% to roughly 5.76% and the discount rate tightening from approximately 9.60% to 9.51%.
Revenue growth assumptions moved slightly lower, from about 6.75% to roughly 6.46%, while the future price-to-earnings multiple compressed from about 16.10 times to roughly 15.40 times.
The divergence between JPMorgan and RBC reflects broader uncertainty about how much runway Greggs has left to grow without leaning too heavily on existing store locations.
Store format innovation, including drive-thrus and digital ordering, remains central to how Greggs plans to expand its food-on-the-go reach in the period ahead.
Value pricing, menu evolution, and supply chain investment are also being closely watched as key drivers behind revenue and margin assumptions embedded in analyst models.
Key risks to the investment case include slower like-for-like volumes, persistent cost inflation, heavy concentration in the UK market, and competitive pressure from supermarket meal deals.
Investors tracking the stock will need to weigh which analyst camp has the more accurate read on Greggs’ ability to deliver in an increasingly competitive consumer environment.
