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The past year has been great for UK shares and the FTSE 100 index in particular. The Footsie is up 22.6% over the past 12 months, excluding cash dividends. That’s its best gain since 2021, when share prices roared back as the Covid-19 pandemic receded. Indeed, many of my family portfolio’s UK stocks are hitting record highs, with the notable exception of the Greggs (LSE: GRG) share price, which had a truly terrible 2025. However, I’m hopeful that this well-known FTSE 250 share will have a better 2026.
Gloomy Greggs
At first, Greggs shares started last year strongly, peaking at 2,890p on 8 January 2025 after reporting encouraging trading results. Alas, the share price has been sliding pretty much ever since. Indeed, by 24 November, the shares had halved in value. Yikes.
On 25 November, I suggested that shares in the high-street bakery chain had fallen too far and seemed a bargain to me. And since their November low of 1,407.2p, they have soared.
As I write, the Greggs share price stands at 1,733p, valuing this Newcastle-based firm at £1.8bn. That’s up almost a quarter (23.2%) since they bottomed out. This gives me hope that I can still spot a bargain business when I see one.
For the record, my family portfolio bought Greggs shares last July, paying 1,683p a share for our stake. To date, we are sitting on a tiny paper gain of 50p a share — up 3% — but I have high hopes for our future returns.
Bargain baker?
At current price levels, Greggs stock still seems undervalued to me. The shares trade on a modest multiple of 12.3 trailing earnings, delivering an earnings yield above 8.1% a year. Also, their dividend yield of 4% beats the FTSE 100 and most other shares listed in London. Even better, this payout looks solid, being covered more than twice by historic earnings.
That said, Greggs endured tough trading conditions in 2025. As well as lower sales growth, margins were hit by higher costs — including increased employer National Insurance contributions. And despite price rises, revenues, earnings, and cash flow all suffered.
Despite its heightened volatility in 2025, the Greggs share is actually up 2.1% over the last six months. Nevertheless, the shares might see sharp price swings on Thursday, 8 January. That’s the day the group releases the trading update for the final quarter of 2025.
Of course, if these numbers look good and beat market expectations, then I’d expect the share price to jump. But if they prove to be a damp squib, then the shares could slump. Right now, only insiders have this knowledge — the rest of us have to sit tight until 7am on Thursday.
Finally, it remains to be seen whether Greggs shares are a fallen angel (a good company temporarily suffering) or a falling knife (a share that continues to fall). However, no matter what happens on 8 January, I suspect we will hold onto our shares until this fog clears!
What other shares are making big moves in the market right now?
