Greggs Shares: Improving Consumer Outlook to Lift Stock – Edison

Greggs’ (LON: GRG) near-term growth prospects remain constrained by a soft consumer backdrop, but analysts at Edison say an eventual improvement in household sentiment could provide the catalyst the stock needs.

The firm’s latest assessment follows Greggs’ fourth-quarter update, which showed weaker revenue trends despite outperforming the wider food-to-go market.

Edison notes that full-year 2025 profit before tax is expected to meet management guidance, even though revenue of £2.15 billion fell slightly short of earlier forecasts.

The group continues to emphasise that it is gaining market share, but underlying growth has slowed as volumes remain pressured.

For 2026, Edison adopts a cautious stance. The firm highlights three key challenges: a reduced expectation for overall market growth, lower planned net new store openings to maintain quality, and anticipated margin dilution linked to ongoing infrastructure investment.

As a result, Edison forecasts flat underlying profit next year, even with revenue expected to rise around 7 percent, supported by store expansion and the partnership with Tesco for the Bake at Home range.

Valuation remains a central point. Greggs trades at a forward price-to-earnings multiple below its long-term average of about 19 times, reflecting the limited short-term earnings momentum.

Edison says any signs of consumers feeling more confident would likely help re-rate the stock given its strong brand, disciplined operations and continued market share gains.

TradingView data shows that eight analysts rate the shares a Buy, five Hold and two Sell.