Greggs (LSE: GRG) shares have moved higher in recent weeks, driven largely by a positive third-quarter trading update posted on 30 September.
The update covered the 13 weeks to 26 September and showed total sales rising 7.7% year on year, with company-managed shop like-for-like sales up 3.4%.
For the broader 39-week period to 26 September, total sales climbed 7.4% while company-managed shop like-for-like sales rose 2.6%.
The bakery chain attributed the improved trading to continued menu innovation and more settled weather conditions during the period.
As a result of this trading performance and continued strong cost control, Greggs said it expects a “modestly improved” outcome for 2026.
On the expansion front, Greggs expects to open around 100 to 110 net new shops in 2026, alongside 12 new Greggs Express convenience retailing installations.
The solid update prompted three City firms to raise their price targets for the stock, signalling growing confidence among institutional analysts.
Barclays lifted its price target to 2,300p from 2,185p, representing approximately 13% upside from the current share price at the time of the update.
Berenberg also raised its forecast to 2,300p from 2,200p, similarly projecting potential gains of around 13% from current levels.
Deutsche Bank increased its target to 1,420p from 1,330p, though its revised target still sits roughly 30% below where shares were trading at the time.
The company has now posted back-to-back encouraging updates, suggesting operational performance is on a clear upward trajectory after a period of consolidation.
Greggs shares had been trading near 1,500p for close to a year, and the recent momentum may signal the beginning of a new upward trend for the stock.
However, the valuation picture is less straightforward, with the shares currently trading on a forward price-to-earnings ratio of approximately 16, which leaves limited room for value-focused investors.
Risks remain on the horizon, including uncertainty around consumer spending levels and the potential long-term impact of GLP-1 weight-loss drugs on demand for Greggs products.
Short interest in the stock also remains notably high, indicating that a significant number of sophisticated investors are actively betting against the shares and see material downside risks ahead.
