About a minimum of 52 weeks, is the price of Greggs shares now an unnecessary bargain?

He Greggs (LSE: GRG) The price of shares has had a horrible start in the year. Only months ago, the action was changing hands above £ 31. Today, it is quoted below £ 18 while the business fights a lot of challenges.

So, the Ftse 250 Does the sausage roll retailer now offer a cheap investment opportunity? Or have they become the actions of Greggs into an obsolete value trap to avoid?

Let's explore.

A bitter taste

At first glance, collapse in the price of Greggs shares may seem unjustified. Income approved £ 2 billion for the first time last year and earnings before taxes increased 8.4% to reach £ 204 million. Those seem to be solid numbers, so what is happening the earth?

Well, the stock market is often described as a prospect. Essentially, the past results are yesterday's story. What really matters are the clues that can provide investors on the future growth trajectory of a company. On this front, there are multiple headaches for Greggs shareholders.

The growth of similar sales has decreased the rhythm of a snail, advancing only 1.7% higher in the first nine weeks of 2025. The company cited “Challenging climatic conditions“In January as a factor behind the deceleration. It is rarely a good sign when a company is blaming the British winter for a disappointing performance.

In addition, the Newcastle -based business warned that margins could be compressed in 2026 and 2027, affected by investments in manufacturing, logistics and distribution. To aggravate the difficulties, the increases to the national dignified salary and an increase in the contributions of the National Employer Insurance add inflationary pressure, which could damage the final result.

Fundamentally, it seems that the wind has been taken from the company's candles. The price of Greggs actions has historically enjoyed a strong positive impulse, driven by rapid growth in several metrics. In the food market, the company cannot afford to take a break while competitors are put into account.

Silver coatings

Although things may seem gloomy for Greggs, there are compensatory reasons to be optimistic. Patient investors can still be rewarded since the board is still optimistic that can return to its long -term previous growth trajectory, even if it has been.

In addition, there was a saving grace for investors that prioritize passive income. The group increased its dividend of the whole year by 11% to 69p per share. Dividends are well covered in twice anticipated profits, providing shareholders with a decent security margin.

From an assessment perspective, the price of Greggs shares is also more attractive today. The Price to Profit ratio (P/E) has been reduced considerably in relation to the historical average of the action. When operating at a multiple of 13 times profits, there is a credible case that the actions are cheap today.

Finally, the ambitious long -term expansion plans to operate more than 3,000 sales points of the United Kingdom indicate that there could still be room for greater growth. In 2024, the business celebrated the opening of its 2,600 store and aims to deliver 140 to 150 new stores this year.

My shot

I have impressed the Greggs business in the past, but the last results have pause me to think. Although the action looks cheap today, I am reluctant to invest until I see concrete evidence that the company can return to its glory days. In general, I see better investment opportunities in other places.