Greggs (LSE: GRG) has had a remarkable run in 2026, with shares climbing 31% higher to reach 2,108p as of market close on Friday, 9 October.
The bakery chain’s stock has roared back into favour after enduring significant pressure in recent months, drawing renewed attention from investors and analysts alike.
One broker recently reiterated a price target of 2,300p for the stock, prompting fresh debate about whether Greggs can sustain its momentum over the next 12 months.
The biggest catalyst behind the recent rally was a strong interim results release on 29 July, which sent shares sharply higher in a matter of days.
Greggs reported a 19.7% increase in pre-tax profit to £76m alongside a 7.2% increase in total sales to £1.1bn, clearly impressing investors hungry for positive news.
The company’s growth strategy appears to be delivering results, with sales boosted by menu innovations, shop expansion, and alternative retail environments.
The stock jumped 30% in the final week of July alone and has continued to build on those gains in the months since, reflecting growing confidence in the business.
Beyond the trading results, a significant shift in short-seller sentiment has also played a meaningful role in supporting the share price recovery.
Back in March 2026, Greggs was the second-most-shorted stock in the UK, meaning a large number of traders were actively betting against the company’s share price.
The recent surge has pushed Greggs down to 15th on the UK’s most-shorted list, a dramatic repositioning that has removed considerable downward pressure on the stock.
As Dan Coatsworth of AJ Bell noted on 1 October 2026, “Greggs is fighting back after a sluggish period and an improvement in sales growth could prompt short sellers to rethink their positioning.”
When short sellers reverse their bets, they are required to buy back shares to cover potential losses, which itself provides additional upward support for the price.
Analysts at Berenberg Bank released an updated report on 2 October, reiterating their Buy rating on Greggs with a price target of 2,300p, adding further institutional credibility to the bullish case.
Reaching 2,300p would represent a further 9.1% gain from the current share price, a target that looks achievable given the company’s operational momentum.
At the current price-to-earnings ratio of 16.4, a move to 2,300p would push the valuation to approximately 18 times earnings, assuming profits remain unchanged.
That multiple does not appear excessive for a company with Greggs’ brand strength, particularly if earnings per share continue to climb on the back of upgraded full-year results.
The company now carries a market capitalisation of £2.2bn, reflecting how significantly sentiment has shifted toward the business over the past six months.
Risks remain, including the possibility of weaker consumer spending or a slowdown in the turnaround strategy, both of which could weigh on future earnings.
However, management has moved effectively to steady the strategic direction of the business while reducing near-term pressure from short sellers positioned against the stock.
For investors seeking a combination of dividend income and growth from an established FTSE-listed name, Greggs at its current valuation presents a compelling case worth evaluating carefully.
