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This has been a brutal 12 months for shareholders of high-street meals chain Greggs (LSE: GRG). The Greggs share worth has crashed exhausting in 2025, leaving its house owners — together with my household portfolio — feeling fairly queasy. With this inventory mendacity far beneath the highs of 2021/22, what would possibly cease the rot and get this share surging once more?
Ugly Greggs
In some ways, Greggs is a superb British success story, serving ‘food on the go’ — together with sausage rolls, sandwiches and sizzling drinks — to hundreds of thousands of consumers each day from over 2,650 shops.
The group began out in Newcastle upon Tyne in 1939, with John Gregg delivering items by bicycle. The primary store opened in Gosforth in 1951 and the corporate goals to develop its property to three,000 shops.
I confess that I’m an enormous fan of Greggs and its good-value choices. This is perhaps as a result of my origins additionally lie within the North East of England, the place I lived for the primary 5 years of my life. Nevertheless, as current shareholders on this chain, we’re sitting on a major paper loss. Disclosure: we purchased our stake (not a steak bake!) for 1,683p a share on 2 July.
At their all-time excessive, Greggs share peaked at 3,443p on 30 December 2021. As I write, this inventory trades at 1,415p, valuing this FTSE 250 agency at beneath £1.5bn — a far cry from its former excessive.
At its 2025 peak, the shares hit 2,890p on 8 January, nevertheless it’s been steeply downhill just about ever since. For the document, the share worth is down 33.2% over six months and 47.7% over one 12 months. It’s additionally nearly halved this calendar 12 months (-49.1%) and is down 18.5% over the previous 5 years.
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Worth entice or restoration play?
The collapsing Greggs share worth implies that it now trades on round 10 instances earnings, delivering an earnings yield nearing 10%. Additionally, the plunging worth has boosted the dividend yield to a tasty 4.9% a 12 months. This payout is roofed over two instances by historic earnings, however retailers have been struggling for the reason that summer time.
To me, these fundamentals hardly seem like these of a failing agency. Somewhat, I consider that this inventory is firmly in bargain-bin territory and could possibly be primed for restoration. Certainly, if I might purchase this whole enterprise at at present’s market valuation, I wouldn’t hesitate to take action.
That stated, my first foray into Greggs shares has been problematic. At current, we’re nursing a 15.9% loss on paper, excluding money dividends. To this point, catching this falling knife has left my household with bloody fingers.
For now, issues look gloomy for Greggs, with earnings hit by slowing gross sales development, greater employer Nationwide Insurance coverage contributions, and decrease margins. However this isn’t a garbage enterprise — for my part, it’s simply going by way of some short-term wobbles.
In the long run, I anticipate gross sales development and property enlargement to renew, lifting Greggs’ revenues, earnings, money stream — and its share worth. Nevertheless, if chancellor Rachel Reeves unveils new enterprise taxes in her Funds on Thursday, 26 November, then all bets are off!
