Greggs‘ (LSE:GRG) share price has been soggier than a three-day-old sausage roll in 2025. Down 40%, the FTSE 250 baker’s slumped as its supreme growth credentials have crumbled like a sponge cake.
That’s enough metaphors for now. But you get the point. And with consumer spending still under pressure in the UK, 2026 looks like it could be another difficult year.
Or am I being overly pessimistic? Judging by City forecasts, next year could in fact see Greggs shares stage a terrific recovery.
Twelve brokers currently have ratings on the company. Their average 12-month price target is £19.98, up 19% from £16.77 today.
However, one analysts expects Greggs’ share price to skyrocket. They’re predicting it to strike £26.70 over the next year, representing a premium of 59% from current levels.
So what could spark a sharp turnaround next year?
Sales cool
In many ways, Greggs has been a victim of its own success. Britons love the cheap pastries, cakes and other treats it serves up. And by offering them at value prices, the company enjoyed spectacular sales growth.
That’s not all. Menu refreshments, including the introduction of pizza, fried chicken and potato wedges, went down a storm. Strategic investment in digital channels — like developing its popular Greggs mobile phone app, and partnering with delivery giants such as Just Eat and Uber Eats — also drove revenues through the roof.
The problem is even value operators like this haven’t been spared the broader downturn in consumer spending.
Sales haven’t dropped off a cliff, but like-for-like sales were just 1.5% in the September quarter. But it’s a far cry from the stunning rises the market had become used to. Like-for-like sales growth was 5% in the third quarter last year, and 14.2% in the same 2023 period.
With the new year tipped to remain difficult for consumers, it’s no surprise investors have cooled on Greggs.
What could drive Greggs higher?
Yet some have argued the scale of the share price drop this year is over the top.
Greggs’ shares now change hands on a forward price-to-earnings (P/E) ratio to 12.8 times. That’s significantly below the 10-year average of 22-23, and suggests an attractive buying opportunity for long-term investors.
My view is that while the baker’s experiencing a bump in the road, its overall growth story remains largely in tact.
Its expansion into the lucrative and fast-growing delivery and evening markets have much further to go. It’s also set to increase store numbers to 3,000 over the next few years, supported by increases in factory capacity and logistics.
Encouragingly, the lion’s share of new openings will be in high-footfall areas such as airports and train stations too.
Are Greggs shares a potential Buy?
Encouragingly for 2026, latest financials in October suggests the company may finally be turning the corner.
Better trading in August and September saw the company maintain its full-year forecasts, ending a run of downgrades. If it can repeat the trick with its Q4 update on 8 January, Greggs’ share price (which is up 19% in the last month) may continue its strong recovery.
While not without risk, I think the baker’s a top stock to consider in the new year.
