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Greggs (LSE: GRG) shares have stumbled recently, but there are a few reasons that I think they could still offer good value in 2026 for patient investors.
What’s been happening to the Greggs share price?
After a strong multi-year run, the company has hit a bit of a rough patch. Warmer weather has hurt sales, with consumers less likely to purchase hot baked goods during heatwaves as we’ve seen in recent years in the UK.
Coupled with higher costs and cautious consumer spending, these factors have weighed on earnings and guidance, and the share price has dropped back from previous highs.
As I write late on 16 January, the stock trades at 1,650p, leaving the bakery chain valued at a market cap of £1.7bn.
Despite the wobble, trading has not collapsed. Sales are still growing, and the footprint continues to expand, with thousands of shops nationwide and more openings planned.
Management is pushing into evenings, delivery, and drive-thru sites, aiming to squeeze more value out of the brand and existing infrastructure. Investors aren’t totally sold, with the stock down 25.7% in the last 12 months.
Valuation
The pull-back means Greggs now sits on a valuation that I think makes it worth considering for value investors.
The stock has a trailing price-to-earnings (P/E) ratio at 11.7, down from closer to 19 as recently as May 2025 and below the Footsie average. For a well-known national food-on-the-go brand still opening new sites, that does not appear demanding.
Income adds another plank to the story. Greggs has a record of growing its ordinary dividend over time. On the current share price, the stock has a dividend yield of 4.2%. That is above the Footsie average and a competitive payout, particularly for a stock still trying to grow.
There are clear risks. Like-for-like sales growth has slowed, which raises questions about how far the core format can be stretched. Changing eating habits, including the rise of weight-loss drugs that are impacting all sorts of food and beverage stocks, could also dampen demand for traditional high-calorie treats over time and force further menu changes.
My verdict
For long-term investors who focus on sensible valuations, strong brands, and cash returns, I think Greggs still looks like a solid business going through a wobble rather than a structural collapse. A low-teens P/E ratio, a decent yield, and continued store openings are not typical of a company in distress.
That said, this view could be wrong. If profit growth stalls for several years, or if shifting consumer behaviour hits margins harder than expected, Greggs shares might stay cheap, or get cheaper.
Even so, in a diversified portfolio, this mix of reasonable valuation, dependable brand, and growing income is why I think Greggs shares are worth a closer look for value investors in 2026.
