JPMorgan has maintained an Overweight rating on Greggs (LSE:GRG) while lifting its price target from £20.50 to £22.10, signalling continued confidence in the bakery chain’s long-term growth potential.
The move reflects fresh analyst work on Greggs and contributes to a broader upward revision in the stock’s fair value estimate, which has risen from £17.77 to £18.74.
RBC Capital has taken a more cautious position, downgrading Greggs from Outperform to Sector Perform, effectively placing the stock more in line with its peer group.
RBC cited the difficulty of achieving further cost savings after recent efficiency efforts, as well as the stock’s recent share rally, as reasons for its more measured stance.
Despite the rating cut, RBC still raised its price target on Greggs from £18.30 to £19.60, suggesting the firm sees some residual upside but views the risk-reward balance as more neutral than before.
The updated fair value model shows several key assumption shifts, with the revenue growth forecast edging higher from 6.46% to 6.62%, reflecting modest optimism about the company’s top-line trajectory.
Profit margin assumptions have moved slightly in the other direction, ticking down from 5.76% to 5.73%, pointing to ongoing cost pressures that continue to weigh on the business.
The future price-to-earnings multiple used in the valuation has increased from 15.40x to 16.23x, while the discount rate has eased from 9.51% to 9.46%, both of which support a higher fair value outcome.
Greggs has been pursuing a growth strategy centred on expanding into drive-throughs, retail parks, supermarkets, and transport hubs, aiming to grow food-on-the-go sales without cannibalising its existing store network.
Digital channels are also playing an increasingly important role in the company’s business model, with a loyalty app now accounting for 25% of shop visits, alongside growing use of delivery platforms and digital ordering.
Analysts are watching several risk factors closely, including stagnant like-for-like volumes, persistent cost inflation, and shifts toward healthier eating, all of which could pressure Greggs’ margins over the longer term.
Climate-sensitive trading patterns have also been flagged as a meaningful variable, given that weather conditions can significantly influence customer footfall and purchasing behaviour at Greggs outlets.
With JPMorgan bullish and RBC more cautious, the analyst community appears divided on whether Greggs can sustain the momentum that has driven its recent share price performance into 2026.
