Greggs shares have slumped 21% in 2025. Time to consider buying?

The famed sausage roll maker’s share price has had the stuffing knocked out of it in recent weeks. Should our writer now get greedy for Greggs shares?

| 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.

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

It has not been a good year so far for Greggs (LSE: GRG). Greggs shares have crashed  21% this year. Yes, this year. Less than three weeks into 2025, the baker has had over a fifth wiped off its share price.

But as a long-term investor, I have had my eyes on the sausage roll supplier. So could this share price tumble represent a buying opportunity for my portfolio?

Concerns about future customer demand

What explains that fall? This month, the FTSE 250 business updated the market on its performance last year. Total sales grew 11% year-on-year. The fourth quarter saw sales growth slow, but it still came in at a pretty impressive 8%.

Should you invest £1,000 in Greggs Plc right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Greggs Plc made the list?

See the 6 stocks

The company opened a record number of new shops, it expects strong ongoing opening momentum and the year should come in line with the board’s expectations.

All of that raised the question, why the price crash? After all, that news sounds upbeat.

Created with Highcharts 11.4.3Greggs Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

One clue was a decline in net cash from £195m to £125m. Still, fitting out new shops – as well as planning a new distribution centre – eats up cash. But as a long-term investor I see that as potentially positive for the business.

But the bigger concern, in my opinion, was Greggs’ take on what might happen next. It pointed to lower consumer confidence as a key risk to expenditure. That, it seems, has given the market fright.

Lots to like about the long-term outlook

I think that is a valid concern. The company said it had carefully managed costs in the fourth quarter, so while it ought to be able to meet expectations for 2024 performance, I see a risk that higher costs could be more problematic for profits at the full-year level in 2025.

But Greggs has been here before, many times. It has honed its business model through recessions, weak consumer spending, shop shutdowns and more. I have confidence that management will continue to move it forward positively.

Greggs has a unique brand and has done a good job developing strong products in what many thought was basically a commodified space. Its large shop estate gives it economies of scale and it has also been harnessing digital technology to help drive sales (although in my case I find its screen-based pricing displays a step backwards from when I could just look at a product and see a price tag beside it).

Not yet a bargain, but may be heading there

Still, Greggs trades on a price-to-earnings ratio of 17. So even with those strengths, I would not describe it as a bargain especially taking into account the potential for a profit squeeze this year, due to weaker consumer spending and also higher costs via higher employment costs.

But Greggs shares are 7% cheaper than they were five years ago. The business is now bigger and, in my opinion, more battle-tested than it was then.

At this price, I am still not ready to buy. But I am keeping a close eye to see whether further share price falls could make this seem like an attractive long-term buying opportunity.

Should you invest £1,000 in Greggs Plc right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Greggs Plc made the list?

See the 6 stocks

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

C Ruane has no position in any of the shares mentioned. The Motley Fool UK has recommended Greggs Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

10% dividend yield! Here’s a FTSE 100 share to consider in April for passive income

This FTSE 100 stock just soared past the 10% yield mark, making it a potentially lucrative option for investors targeting…

Read more »

Young black woman using a mobile phone in a transport facility
Investing Articles

3 FTSE 100 safe haven stocks to consider as trade wars bite

I'm confident in the long-term outlook for the FTSE index of stocks. But these blue chips may protect investors from…

Read more »

Investing Articles

Here’s how Trump tariffs could hand us some top passive income bargains

As tariff terror grips the stock market, it's time for passive income investors to steel our nerves and look for…

Read more »

Investing Articles

These FTSE shares may offer some safety as Trump slaps tariffs on trading partners

FTSE shares moved lower on 3 April, after US President Donald Trump introduced hefty tariffs on its trading partners. These…

Read more »

Investing Articles

6.8% dividend yield! Consider these 2 ‘secret’ passive income stocks to target a £1,360 payday in 2025

Looking for ways to generate above-average dividend income? These lesser-bought income stocks are worth a close look.

Read more »

Elevated view over city of London skyline
Investing Articles

The M&G dividend yields over 10% — and could get higher!

Christopher Ruane explains why he's upbeat about the long-term outlook for the M&G dividend yield and would happily buy the…

Read more »

Young Caucasian man making doubtful face at camera
Investing Articles

2 popular UK growth stocks I wouldn’t touch with a bargepole in today’s market

Buying growth stocks can deliver market-beating returns, but this FTSE 250 pair doesn't look like a convincing investment for our…

Read more »

The flag of the United States of America flying in front of the Capitol building
Investing Articles

10 FTSE shares falling today after President Trump’s tariffs bombshell!

Our writer explains why JD Sports Fashion from the FTSE 100 and a diverse bunch of other UK stocks are…

Read more »