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Greggs (LSE: GRG) shares have stumbled lately, however there are a couple of causes that I believe they might nonetheless supply good worth in 2026 for affected person buyers.
What’s been taking place to the Greggs share value?
After a robust multi-year run, the corporate has hit a little bit of a tough patch. Hotter climate has harm gross sales, with customers much less prone to buy scorching baked items throughout heatwaves as we’ve seen in recent times within the UK.
Coupled with larger prices and cautious client spending, these components have weighed on earnings and steering, and the share value has dropped again from earlier highs.
As I write late on 16 January, the inventory trades at 1,650p, leaving the bakery chain valued at a market cap of £1.7bn.
Regardless of the wobble, buying and selling has not collapsed. Gross sales are nonetheless rising, and the footprint continues to broaden, with 1000’s of outlets nationwide and extra openings deliberate.
Administration is pushing into evenings, supply, and drive-thru websites, aiming to squeeze extra worth out of the model and current infrastructure. Buyers aren’t completely offered, with the inventory down 25.7% within the final 12 months.
Valuation
The pull-back means Greggs now sits on a valuation that I believe makes it price contemplating for worth buyers.
The inventory has a trailing price-to-earnings (P/E) ratio at 11.7, down from nearer to 19 as lately as Might 2025 and beneath the Footsie common. For a widely known nationwide food-on-the-go model nonetheless opening new websites, that doesn’t seem demanding.
Revenue provides one other plank to the story. Greggs has a report of rising its bizarre dividend over time. On the present share value, the inventory has a dividend yield of 4.2%. That’s above the Footsie common and a aggressive payout, significantly for a inventory nonetheless making an attempt to develop.
There are clear dangers. Like-for-like gross sales development has slowed, which raises questions on how far the core format might be stretched. Altering consuming habits, together with the rise of weight-loss medication which are impacting all types of meals and beverage shares, may additionally dampen demand for conventional high-calorie treats over time and power additional menu adjustments.
My verdict
For long-term buyers who deal with smart valuations, sturdy manufacturers, and money returns, I believe Greggs nonetheless appears to be like like a strong enterprise going by way of a wobble fairly than a structural collapse. A low-teens P/E ratio, an honest yield, and continued retailer openings should not typical of an organization in misery.
That mentioned, this view could possibly be fallacious. If revenue development stalls for a number of years, or if shifting client behaviour hits margins tougher than anticipated, Greggs shares would possibly keep low cost, or get cheaper.
Even so, in a diversified portfolio, this mixture of cheap valuation, reliable model, and rising revenue is why I believe Greggs shares are price a more in-depth search for worth buyers in 2026.
