Greggs‘ (LSE:GRG) share price has proved soggier than a week-old sausage roll of late. Down 22% over 12 months, the beaten-down baker has sunk as consumers have cut spending, smacking sales growth.
A 4.3% trailing dividend yield has helped investors to reduce their losses. But at £16.66 per share today, Greggs shares have still delivered a negative return of 17.7% since this point in 2025. To put that into context, a £10,000 investment a year ago would now be worth £8,230 today.
However, the FTSE 250 stock has proved more resilient at the start of 2026. The question is, could Greggs’ share price be at the start of a strong recovery?
Too cheap to miss?
A look at the company’s valuation may help us answer this question. Its forward price-to-earnings (P/E) ratio has slumped to 13.3 times, some way below the 10-year average of 22-23.
This drop reflects Greggs’ slide in status: it’s no longer a hot growth stock that warrants a premium valuation. Like-for-like revenues rose 2.4% from company-managed stores last year, slumping from 5.5% in 2024. For the whole of 2025, City analysts expect earnings to have slumped 18% year on year, with higher costs also hitting the bottom line.
Yet on balance, does Greggs’ share price deserve to have toppled so sharply? I’m not so sure. At current levels, I think the company could be considered a bona fide value share. And as investor demand for cheap shares heats up, I think this could underpin an imminent price rebound.
Targeting a 15%+ return
City analysts are confident it can spring back sooner than you might think. Fifteen of them currently have ratings on Greggs shares, providing a deep and healthy range of opinions. And their average 12-month price target is £18.53, up 11.3% from today’s levels.
With a forward dividend yield of 4.1%, too, investors could make an 15.4% total return over the period, if forecasts prove accurate. That would turn a £10k investment today into £11,540.
Greggs still faces a serious of real problems, number one being a continued cost-of-living crisis that has hit sales. It’s also vulnerable to changing consumer tastes, as people — and especially those on diet jabs like Ozempic — eat less and choose healthier options.
However, latest quarterly results suggest the baker might be past the worst. Q4 like-for-like sales rose 2.9%, also better than the 2.5% of the same quarter in 2024.
Are Greggs shares a Buy?
While not without risk, I think Greggs is a top stock to consider right now. It still has multiple growth levers to pull, both this year and over the long term. These include:
- expansion into the evening and delivery markets
- menu refreshments (new products in 2026 include iced matcha coffees and Korean BBQ chicken)
- ongoing store expansion focused on high-footfall destinations (such as train stations)
On balance, I’m confident that this battered stock will rebound strongly as its growth outlook improves. I hold Greggs shares in my portfolio, and I’ll consider buying more when I next have cash to invest.
