GreggsThe (LSE:GRG) stock has had a complex few years. As of 2025, the price has dropped from around 2,800p to just over 1,600p today.

The decline reflects a combination of weaker consumer confidence, rising costs and possible over-expansion as the UK economy cools.

Still, when I look at broker research, most professionals don’t give up. They are generally cautious, but still lean towards a recovery rather than a sustained decline.

What exactly do they think may be missing in the market?

What are brokers based on?

Of the 15 analysts I checked, I found seven Buy ratings, five Hold ratings and four Sell ratings, for a Neutral consensus rating. Their average 12-month price target is 1,700p, which is only about 6% above current levels.

In low, no one is expecting fireworks – but does that mean Greggs is a lost cause? Not so brisk.

Some large names remain bullish about the company’s long-term recovery. JP Morgan, Barclays AND UBS all have recently expressed positive sentiment again, setting 12-month targets ranging from around 1,910p to 2,200p.

In particular, JP Morgan called it a “structural winner”, pointing to robust unit economics and high sales per square foot. He noted that the decline in share prices is excessive given that earnings forecasts have fallen only slightly.

The bank expects an improvement in profits and free cash flow due to the creation of novel stores and increased distribution, which will translate into profits.

RBC Capital also seems unfazed by the price, giving it an “Outperform” rating. It anticipates future organic growth of around 11% per year, supported by a seven-year expansion plan and the potential for greater cash returns as costs come down.

However, all these lofty expectations are based on the assumption that sales and margins will improve from this point on. What happens if they don’t?

Where bears see trouble

On the risk side, the obvious headache is weaker consumer demand. The Management Board described the outlook for 2026 as “cautious but hopeful”, under pressure from higher living costs. If customers continue to cut back or reduce sales, it may be harder for Greggs to recoup money already spent on novel stores.

There is also a newer structural problem: weight loss drugs. Jefferies recently downgraded its rating from Buy to Hold and lowered its target from 2,500p to 1,610p. It is concerned that the growing popularity of GLP-1 drugs will hurt sales for bakeries such as Greggs, impacting medium-term growth.

Chief executive Roisin Currie said “it existsundoubtedly” appetite suppressants are impacting the company’s business, with more customers looking for smaller portions and healthier options.

So Greggs is adapting its menu, but it’s still unclear how far this trend will go.

Is it worth the wait?

For long-term investors, the low price is attractive. Moreover, the 4.3% yield adds value even if the price remains constant. After all, it’s a good brand with good store economics and a price 57% below estimated fair value.

However, if profits don’t return soon, the price could fall even further.

At today’s valuation, the market appears to be pricing in a sluggish, robust comeback, not a quick rebound. The real question, then, is whether it is worth tying up capital for a potential economic recovery that could take years.

I’ll keep my shares for now, but I won’t consider buying any more today. In my opinion, there are currently better earning opportunities on the British market.

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Mark Hartley owns shares in Greggs.