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Greggs (LSE: GRG) share worth has been underperforming just lately, however there are a number of explanation why I feel it may well nonetheless provide good worth for affected person buyers in 2026.
What occurred to Greggs inventory worth?
Though the corporate has been doing nicely for a number of years, it has discovered itself in a little bit of a troublesome state of affairs. As we’ve got seen within the UK lately, hotter climate is having a unfavourable affect on gross sales, with customers much less possible to purchase scorching baked items throughout heatwaves.
Mixed with increased prices and cautious shopper spending, these elements weighed on earnings and prospects, sending shares down from historic highs.
As I write late on January 16, the share worth is buying and selling at 1,650p, giving the bakery chain a market capitalization of £1.7bn.
Regardless of the volatility, buying and selling has not collapsed. Gross sales are nonetheless rising and its footprint continues to broaden, with 1000’s of shops throughout the nation and extra deliberate to open.
Administration is specializing in late-night, supply and drive-thru websites, aiming to squeeze extra worth out of the model and present infrastructure. Traders aren’t utterly offered on the inventory, with the inventory down 25.7% up to now 12 months.
analysis
This decline means Greggs is now at a valuation price contemplating for worth buyers.
The corporate’s price-to-earnings ratio (PER) has been trending at 11.7 instances, which was round 19 instances as of Could 2025, however is decrease than the Footsie common. That does not appear that troublesome, contemplating that well-known nationwide takeout meals manufacturers are nonetheless launching new websites.
Revenue provides a brand new component to the story. Greggs has a monitor file of accelerating its odd dividend over time. On the present inventory worth, the dividend yield is 4.2%. That is above the Hussey common and a aggressive dividend, particularly for a inventory nonetheless making an attempt to develop.
There are apparent dangers. Slowing like-for-like gross sales progress raises questions on how far core codecs can develop. Adjustments in consuming habits, such because the rise of weight reduction medicine which are impacting meals and beverage inventories of all types, might also scale back demand for conventional high-calorie treats over time, forcing additional menu adjustments.
my verdict
For long-term buyers centered on affordable valuations, sturdy manufacturers and money returns, I feel Greggs seems to be like a strong firm experiencing wobbles relatively than a structural collapse. A P/E ratio within the low 10s, a good yield, and continued retailer openings usually are not typical of an organization in monetary disaster.
Nonetheless, this view could also be mistaken. If revenue progress stagnates for a number of years, or if adjustments in shopper conduct hit margins greater than anticipated, Greggs’ shares might stay low-cost, and even get cheaper.
Nonetheless, this mix of an affordable valuation, trusted model and rising earnings in a diversified portfolio is why I feel Greggs shares are price waiting for worth buyers in 2026.