First, I’m sorry for the terrible pun in my headline. In my defence, the Greggs (LSE: GRG) menu includes 12 items with the word ‘roll’ in their descriptions, several of which are also buttered. Sadly, since my wife and I bought Greggs shares for our family portfolio last year, their price has been far more volatile than I anticipated.
According to analysts, Greggs’ sales growth faces challenges in the form of the latest GLP-1 drugs. So as British dieters lose weight, could I lose my shirt on Greggs stock?
Greggs stock slumps
As I write (on Monday afternoon), the Greggs share price stands at 1,626p, valuing this FTSE 250 firm at £1.65bn. This is far below the 3,443p that the shares peaked at on 30 December 2021. Even as recently as September 2024, the high-street bakery chain’s shares traded at 3,250p. Alas, it’s been pretty much all downhill since then.
Over the last 12 months, the shares have swung between a high of 2,237.88p on 20 May 2025 to a low of 1,407.2p on 25 November 2025. For the record, my family bought our stake last July for 1,696.7p a share. To date, we are sitting on a paper loss of under 4.2% — nothing I’m worrying about just yet.
That said, a number of things now concern me with being a Greggs shareholder. The group has blamed subdued consumer confidence, the cost-of-living crisis, and adverse weather for disappointing sales growth. These are three easy excuses retailers routinely trot out.
Analysts warn that Greggs shares are the most heavily shorted stock on the London stock market. In other words, some investors are betting big on further share-price falls. By the way, today’s price slide followed a report from Jefferies analysts claiming that the rapid uptake of weight-loss jabs could hit demand for the baker’s products.
Value trap or recovery play?
Currently, Greggs stock trades on 11.5 times trailing earnings, delivering an earnings yield nearing 8.7%. Hence, their market-beating dividend yield of 4.2% a year is covered a healthy 2.05 times by historic earnings.
This leaves Greggs shares close to the bottom of their 10-year valuation range. As a value investor, I aim to buy low and sell high. Hence, I have no interest in selling our holding at current levels. My hope is that this business is a classic ‘fallen angel’ and becomes a recovery play, rather than a nasty value trap.
Of course, only time will tell whether I or the hedge funds shorting Greggs shares will be proved right. I think the company’s well-established brand, strong cash flow, and solid returns on capital swing the odds in my favour. Also, sales rise with every new outlet Greggs opens in its 2026 rollout.
In short, I won’t be selling our Greggs stock — and certainly not until I see the company’s preliminary results due on 3 March!
