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After losing roughly 40% of their value in 2025, it’s fair to ask whether Greggs (LSE:GRG) share can finally stage a meaningful recovery next year. Personally, I’m sceptical.
For much of the past decade, Greggs was treated as a growth stock. Revenues compounded at double-digit rates, profits climbed steadily, and the store estate expanded rapidly across the UK.
But the numbers now suggest a business that’s maturing. Revenue growth has slowed and earnings momentum has faded (and even gone into reverse). Normalised earnings per share are expected to have fallen in 2025 before recovering slightly in 2026 — hardly the profile of a high-growth company.
Destined to slow
In many ways, this shift was inevitable. That’s certainly my view.
Greggs is already ubiquitous in the UK, with thousands of locations and limited white space left to exploit. That makes incremental growth harder.
International expansion has been tried before, and it didn’t work. Greggs is fundamentally a domestic business with natural limits because steak bakes won’t work on the continent.
What’s more, it’s a business that has always been constrained by the company’s value-led offering. It simply can’t push prices up significantly above costs because that’s not what the customer base expects.
There’s also a broader structural issue. Consumer trends continue to shift towards healthier eating, and while Greggs has adapted with salads, vegan lines and breakfast options, these will never perfectly align with a baked-goods-led business model.
After all, this is Greggs the Bakers — not Greggs the salad makers.
On the positive side, it’s certainly a brand everyone knows and a lot of people like. And that counts for something, particularly with small retail investors who might like to invest in a business they know and patronise.
Is the stock good value?
The market increasingly views the shares as an income play. The dividend yield has grown strongly in recent years because the share price has flopped — the dividend yield now sits above 4%.
That’s respectable yield, but it also marks a clear change in character. Greggs has quietly transitioned from a growth stock into a dividend stock.
The problem is that neither angle is especially compelling. For me at least.
The price-to-earnings ratio (P/E) of 13.5 times no longer looks cheap when set against low single-digit earnings growth, while the dividend, though reliable, isn’t generous enough to stand out. Investors can achieve similar yields today from government bonds, without taking on equity risk.
The bottom line
For me, 2026 doesn’t look like the year Greggs rediscovers its former momentum.
I actually believe Greggs is a great example of retail investors investing in companies they know, rather than a business they’ve truly researched and understand. Within that, stock momentum is self-propelling as investors are drawn to the rising share price, but sadly the company’s own momentum couldn’t go on forever.
It’s a good company, but still trades at levels I’m not going to entertain. It’s certainly cheaper than it was 18 months ago — when it peaked — but not enough to interest me.
Personally, I don’t believe it’s worth considering in 2026.
