5 Powerful Reasons to Invest in Greggs (GRG LN) Now
Greggs: More Than a Bakery – A Powerhouse in the Making
Greggs isn’t just about sausage rolls and steak bakes—it’s a force to be reckoned with. What started as a humble bakery has evolved into an unstoppable food-to-go empire, proving itself as a dominant player in the UK market. While others struggle with economic uncertainty, Greggs thrives, leveraging its vertically integrated supply chain, high-margin products, and relentless expansion strategy.
1. A Rare Opportunity – Buy a Top-Tier Business at a Discount
Greggs’ stock has plunged over 30% from its highs, but the fundamentals remain rock solid. This isn’t just any stock drop—it’s an overreaction to short-term headwinds, creating a golden opportunity to buy a resilient, high-margin business at a bargain. Now trading at ~15.5x 2025 EPS, well below its recent peak of 22x, the valuation is compelling for long-term investors.
2. Consistent Growth, High Margins & Strong Returns
Greggs has delivered exceptional financial performance, proving its ability to grow through economic cycles:
✅ 150% revenue growth in the last decade
✅ Gross margins above 60%, demonstrating pricing power
✅ Mid-to-high teens ROIC & ROE in the 20s, a clear sign of operational excellence
✅ Sustainable free cash flow (~£150M per year), even with aggressive expansion
This is a business that doesn’t just survive—it thrives.
3. Unstoppable Expansion & Market Domination
Greggs is aggressively expanding, and the runway for growth is still huge:
🔥 Targeting 3,500 stores (currently ~2,500) – a 40%+ increase
🔥 Dominating the UK breakfast market (20% share and growing)
🔥 Pushing into evening trade (1,200+ stores open past 7 PM)
🔥 Tapping into delivery demand via Uber Eats & Just Eat
🔥 Rolling out high-margin iced drinks, with potential for a 5% revenue boost
This isn’t a company running out of steam—it’s one that’s gearing up for years of sustained growth.
4. A Resilient, Cash-Generating Machine in a Tough Market
While competitors struggle, Greggs keeps winning. Unlike premium chains like Pret, Greggs delivers high-quality, affordable food-to-go, making it a go-to option for millions.
🔹 Vertically integrated supply chain keeps costs low & quality high
🔹 Mass-market appeal – Greggs isn’t niche, it’s a daily essential for millions
🔹 Proven adaptability – from a bakery to the UK’s food-to-go powerhouse
🔹 Strong brand loyalty – despite economic uncertainty, customers keep coming back
5. Big Returns Ahead – Strong Dividend & 35% Upside Potential
💰 Dividend payout of ~£2.65 per share over the next few years
📈 Stock price target: £28 (~35% upside by 2027)
🚀 Expected IRR of ~11% per year – a solid return for a best-in-class business
Final Verdict – This is a No-Brainer
Greggs is one of the UK’s strongest retail businesses, with a proven model, high margins, and a clear path to long-term growth. The recent selloff is your chance to buy in before the market catches on. Ignore the short-term noise—this is a long-term winner.