3 reasons why I think the Greggs share price will push higher

The Greggs plc (LON:GRG) share price has been on a great run in recent months. Paul Summers thinks this may continue for the rest of 2021.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

The Greggs (LSE: GRG) share price has more than doubled since my bullish call last September.  Sure, other stocks will have seen even bigger gains as part of the big market recovery. But I still think that’s a pretty sweet result for those who were brave enough to buy last year. In fact, I think more gains lie ahead. Here’s why. 

Greggs share price: on a roll

It would be easy to assume my main reason for thinking the Greggs share price could continue climbing is down to the “great unlock” of the UK’s high streets. Of course, this should help. After all, many of the company’s 2,000-plus shops are located in now-bustling towns and cities. Then again, I also believe quite a bit of the positivity surrounding this is priced in already. 

Inflation Is Coming

Inflation is out of control, and people are running scared. But right now there’s one thing we believe Investors should avoid doing at all costs… and that’s doing nothing. That’s why we’ve put together a special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… and better still, we’re giving it away completely FREE today!

Click here to claim your copy now!

What’s perhaps not priced in so much is the recovery in earnings once overseas travel is allowed to resume. The FTSE 250 has a presence in, or near, many airports in the UK. I suspect that some of the 100 net new stores it plans to open in 2021 will be based at travel hubs. The likelihood there’ll be many more people taking staycations this year also bodes well for sites at service stations. 

Another reason for being optimistic is news the FTSE 250 baker will shortly be trialing two new vegan products, a sausage bap and a ham and cheese baguette. This should provide another boost to Greggs’ bottom line if they can replicate the success of its vegan sausage roll in 2019 and vegan steak bake in 2020. Investors may buy in anticipation, raising the Greggs share price higher. 

Third, the lack of reaction to the company reporting its first annual loss since listing in 1984 suggests people are willing to cut the £2.4bn-cap some slack.

Even the remark that profits wouldn’t return to pre-Covid levels until 2022 “at the earliest” doesn’t appear to have shaken conviction. This shrug of the shoulders from the market should put support under the Greggs share price. In fact, any indication whatsoever that it may have been too conservative on the speed of its recovery could see the stock rocket in value. 


Of course, nothing can be guaranteed. Like all companies, Greggs still faces a number of uncertainties going forward.

Chief among these is the potential for a significant third wave of the coronavirus. Yes, the vaccination programme has been a huge success, so far. However, the possibility of a new variant hitting the shores mustn’t be dismissed.

Greggs’s digital offering should cushion some of the blow if this were to happen. Then again, it’s unlikely to prevent the company’s share price from falling, along with everything else in the UK-focused index.

Just how many people go back to their normal routines once restrictions are fully lifted is another unknown. Greggs earns a lot of money from office workers. The possibility that many businesses will encourage staff to work at home more often wouldn’t be ideal. Uncertainty over the impact of higher unemployment levels could also weigh on sentiment.

Bottom line

Full-year numbers are due mid-May. As things stand, I suspect we could see further positive momentum to the Greggs share price next month and beyond. That said, I’ll remain diversified elsewhere, just in case. 

More on Investing Articles

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

UK shares: 1 cheap dividend stock I bought to combat inflation!

This Fool is on the lookout for the best UK shares to protect himself from soaring inflation. Here is one…

Read more »

Smiling senior white man talking through telephone while using laptop at desk.
Investing Articles

A beaten-down penny stock to buy on the dip!

This penny stock is down 12% in just a few weeks. But at the current price, it looks like a…

Read more »

Young brown woman delighted with what she sees on her screen
Investing Articles

Should I buy Marks and Spencer shares for its growth in July?

Despite posting excellent annual results, Marks and Spencer shares are down 40% this year. Could this be a buying opportunity…

Read more »

Stack of one pound coins falling over
Investing Articles

The Lloyds dividend could keep growing – but will it?

Our writer explains why he's not taking the prospect of a growing Lloyds dividend for granted.

Read more »

Shot of an young Indian businesswoman sitting alone in the office at night and using a digital tablet
Investing Articles

Are BT shares a good buy at 185p?

BT shares offer a fairly attractive dividend and are down considerably over four years. But is this stock right for…

Read more »

An airplane on a runway
Investing Articles

The Rolls-Royce share price is down one-third. Should I buy?

The Rolls-Royce share price has lost a third of its value since the year began. Our writer explains why he…

Read more »

Black woman using loudspeaker to be heard
Investing Articles

Down 57%, cheap NIO shares are ‘no-brainer’ additions to my portfolio!

NIO shares have risen considerably in recent months, but are down over the year. I'm still buying this stock for…

Read more »

Young woman with face mask using mobile phone and buying groceries in the supermarket during virus pandemic.
Investing Articles

Will a recession help or hurt the B&M share price?

The B&M share price has been tumbling and there's a recession looming, So why would our writer still consider adding…

Read more »