Wall Street-style analyst disagreement has arrived for one of Britain’s most recognisable high street names, and the numbers are striking.
Deutsche Bank carries a price target of just 1,420p on Greggs (LSE: GRG), roughly 39% below where the stock currently trades, representing one of the more bearish calls on a FTSE-listed consumer name this year.
Barclays sits on the opposite side of that argument, recently lifting its own target from 2,185p to 2,300p, broadly reflecting the current share price and implying the rally has largely run its course.
The gap between those two positions spans hundreds of pence per share, and resolving it requires understanding just how much of Greggs’ recent momentum is sustainable versus already priced in.
The bakery chain’s shares have surged more than 58% since the beginning of May, a remarkable recovery for a company whose profits actually declined in 2025.
That earnings reversal in 2025 set a low bar for 2026, and Greggs has comfortably cleared it, with pre-tax profits across the first half of the year rising 19.7% after management had initially guided only for flat profits in January.
Product innovation deserves some credit for that turnaround, with iced drinks, high-protein rolls, and the Steak and Stilton Bake all contributing to stronger consumer demand than the cautious outlook had anticipated.
Third-quarter trading extended that momentum, with total sales growing 7.7% and like-for-like sales accelerating modestly to 3.4%, meaning growth is being generated from both newly opened locations and the existing store base.
The company still intends to open between 100 and 110 net new stores before the year closes, supported by new distribution centres in Derby and Kettering that can service a network of up to 3,500 UK locations.
Those infrastructure investments, however, are precisely where Deutsche Bank’s caution likely takes root, even though the bank has not publicly detailed the full reasoning behind its bearish stance.
The Derby and Kettering facilities carry substantial upfront costs and will generate ongoing overheads beginning next year, adding a layer of fixed expense to the business at a sensitive moment.
A proposed manufacturing consolidation could eventually deliver around £20m in annualised savings, but executing that plan is expected to require approximately £60m in upfront expenditure first.
Labour and energy inflation continue to press on margins, and the Office for Budget Responsibility has forecast softer household disposable income in the coming year, a headwind for any volume-driven consumer business.
At roughly 18 times earnings, the valuation is not extreme by historical standards, but after a 58%-plus run, the argument that much of the good news is already reflected in the price carries genuine weight.
