Image source: Getty Images
It has been a year to forget for those invested in Greggs (LSE:GRG). The beloved baker was a reliable stock market performer for a long time, but so far in 2025, the share price has crashed 45%.
There are a few reasons for this, including slowing like-for-like sales, higher employer costs, and weak consumer sentiment. Lurking underneath all this is a nagging suspicion that the UK has reached peak Greggs. In other words, the firm has little growth left to serve up.
Yet, the market is often a fickle beast. It will likely reward any turnaround in fortunes at Greggs with a stock price boost.
So, where do institutional analysts see the Greggs share price heading over the next 12 months? Let’s find out.
Forecasts
Looking at the forecasts, I see that analysts are somewhat divided. Of the 12 giving the stock a rating, half see it as the equivalent of a Buy. Four have it down as a Hold, while two are bearish.
Perhaps unsurprisingly, there’s also quite a wide spread in the share price targets among these experts. The lowest is 1,330p, which is 13% below the current share price of 1,534p. The highest price target is 3,060p — almost double where the stock is now!
But the average price target is 2,104p (37% higher). So, if these experts are broadly correct, then investors today could turn £5,000 into roughly £6,850 in 12 months time.
On top of this, there are expected to be dividends, which would take the total return above £7k. This is based on the forecast dividend yield of 4.5%.
Were this to happen, the one-year gains would be roughly 41%. A fantastic market-thrashing return.
Caveats incoming…
Naturally, this comes with lots of caveats. Analysts’ targets are more like informed guesswork, and we can see how their different assumptions lead to some pretty wild variations.
1,330p? 3,060p? These two brokers cannot both be right!
What’s more, the forecast 4.5% yield might not be met. Trading at Greggs could deteriorate over the coming winter months, leading to lower profits and a dividend cut. In turn, that might spark a fresh sell-off in the shares.
Were this to happen, analysts would revise their calculations and models, with new (almost certainly lower) price targets. So they cannot be fully relied upon.
One to consider?
Nevertheless, all this does suggest that the selling in Greggs shares might be overbaked. The forward price-to-earnings ratio here is less than 12, which is a noticeable discount to previous years. A few months ago, it was nearer 20.
Of course, the dire state of the UK economy and earnings pressure justify a lower valuation. But Greggs has a large and loyal customer base, strong balance sheet, and still largely offers good value for money, in my opinion. It’s even opening its first pub (called The Golden Flake Tavern).
Only time will tell whether we’ve reached peak Greggs. But I suspect that there’s value on offer after the stock’s 45% crash. The dividend yield adds weight to the investment case, I feel.
I’m not going to increase my exposure to the retailer sector, as I already hold shares of Games Workshop and JD Sports. But Greggs might be worth a look for contrarian investors searching for a potential bargain.
This story originally appeared on Motley Fool
