JP Morgan has initiated coverage of Greggs plc with an overweight rating and established a price target of 2,110 pence by December 2027. The target implies 35% upside from current levels. Shares in the bakery chain advanced 6% to 1,680 pence following the announcement.
The investment bank has identified Greggs as a structural winner within the UK consumer sector, citing robust operational metrics across the company’s retail estate. Analyst Borja Olcese noted that proprietary benchmarking analysis reveals exceptional unit economics, including industry-leading performance in gross profit per square foot, underlying profit per square foot, revenue per operating lease, and gross profit per operating lease.
JP Morgan characterises the investment opportunity as offering asymmetric risk-reward potential. The bank observes that Greggs currently trades on trough valuation multiples whilst simultaneously approaching the nadir of its earnings cycle. Under the bank’s bull case scenario, the shares could deliver upside potential of up to 55%.
Several catalysts have been identified that could drive a valuation re-rating. The bank anticipates stronger-than-expected like-for-like sales growth and earnings momentum from the 2026 financial year onwards. An inflection point in free cash flow generation represents an additional catalyst, alongside the potential implementation of capital return programmes.
The analysis positions Greggs to capitalise on improving consumer conditions and operational leverage opportunities. JP Morgan contends that the current market valuation fails to adequately reflect the company’s long-term growth trajectory and profitability profile. The bakery chain’s strong operational fundamentals and favourable positioning within the UK retail landscape underpin the bank’s positive outlook for the shares.
