Here’s how high these brokers think Greggs shares could soon climb!

Greggs (LSE: GRG) is famous for its hot food, but it’s the shares that need warming up. And a couple of broker recommendations suggest it could happen soon.

The Greggs share price has slumped 50% since August 2024. Back then, the country was in the grip of some sort of sausage roll mania — and everyone wanted to fill up on the shares too. But the subsequent descent was as scary as the initial ascent was exciting.

Greggs shares have been flat for most of the past 12 months, though. So has the negative market sentiment finally bottomed? At its highest point in the past decade, Greggs’ price-to-earnings (P/E) ratio climbed to over 28. But now that it’s back down to a forecast 13, I really think we could be seeing a turning point.

Share price targets

Of the most recent brokers offering price targets for Greggs shares, investment bank UBS is the most upbeat with 2,200p on the stock — and Berenberg has set a 2,090p target. Those are 38% and 31% ahead of the price at the time of writing respectively.

There’s a lowball 1,330p from Deutsche Bank. But four of the five I can find with recent updates expect the price to rise. Curiously, these are all reiterations. So what’s likely to get the market to take note and potentially trigger a price rise?

First-half results are due on 29 July. And after a positive 2025, I suspect investors could just be waiting to see how 2026 is going. FY 2025 saw sales rise by 6.8% to £2,151m — but underlying profit before tax fell by 9.4%.

So maybe investors just need to see that profit fall arrested, with a hint of a return to growth. And as it happens, that’s what forecasters expect for the full year. They predict a modest 3.6% rise in earnings per share this year. And we could see a 17% increase between 2025 and 2028.

Tighter pockets

Soaring inflation and its effects on snacking expenditure finally caught up with Greggs. And now we’re looking at a company valued probably very similarly to a high street sandwiches and bakery chain… so about fair value, in my view. A P/E now a bit below the FTSE 100 average and a 4.2% dividend yield above average? That’s starting to tickle my taste buds.

But one thing holds me back. Greggs did a great job of keeping prices rises to a minimum during the worst of the inflation storm. My local branch is on the same block as other food outlets — and they all put prices up a fair bit higher than Greggs.

My fear is that there’s a backlog of higher costs still working its way down to shop counter level. And Greggs shares might not look safe until that’s worked its way out.

I’m encouraged by broker optimism, but I’ll wait and see. I suggest other investors might want to get their eyes on those upcoming interim results before considering buying.

Should you invest £5,000 in Greggs Plc right now?

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Alan Oscroft does not hold any positions in the companies mentioned.