Greggs Share Price: Is the Bakery Giant a Bargain at Current Lows?

Greggs (LON: GRG) shares are trading close to their historically low valuation levels after the bakery chain reported a challenging 2025, according to analysts, though they believe the company still retains long-term growth drivers.

Analysts at Edison Group said Greggs’ full-year results reflected “negative operating leverage from lower volumes” alongside higher costs tied to infrastructure investment, which pushed return on capital employed down to 16% from 20% a year earlier.

Even so, Edison highlighted the company’s ability to outperform the wider market. “There is a clear message of market outperformance, and profit recovery is reliant on easing of pressures on disposable incomes,” the firm said.

“The prospective FY26 P/E multiple is towards the low end of historical multiples, which reflects investor concerns on the outlook for volume growth, both cyclical and structural. More positive volume growth would be more than helpful for the valuation,” the firm added.

Greggs reported revenue growth of 6.8% in 2025, supported by store expansion and stronger growth in its business-to-business channel. However, underlying operating profit declined as higher employment and packaging costs weighed on margins.

Analysts at Hargreaves Lansdown said the results broadly matched expectations but reflected a difficult consumer backdrop. “There’s no escaping the fact that the wider environment is a challenge,” the firm said, citing weak UK economic growth and pressure on consumer spending.

Despite these headwinds, Hargreaves Lansdown said the group is continuing to invest in future growth, including plans to expand the estate toward around 3,000 stores and increase franchised locations.

“We still like the underlying business, including its list of growth drivers, and soft performance last year means an attractive entry point is on offer,” stated the firm. “But the near-term outlook for consumer spending remains muted.”

Meanwhile, analysts at JPMorgan trimmed their price target slightly to 2,050p from 2,060p following the report, maintaining an Overweight rating, signalling continued confidence in the longer-term outlook.