Greggs getting a bit stale?
Down 35% already in 2025, independent analyst Alistair Strang looks at the high street's favourite sausage roll chain for signs that a bottom is in.
5th March 2025 07:21
by Alistair Strang from Trends and Targets
One of the great mysteries of the stock market was exhibited this week, Greggs (LSE:GRG)' boasting of sales passing a record £2 billion but still experiencing a 10% share price drop and price movement below an uptrend since 2020.
In fairness, the market has spent since the start of 2025 expecting this drop, share price movements during the first two months of the year spreading themselves as this as the butter on a Greggs sandwich!
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To be honest, it’s an area this writer knows nothing about, never having been in a Greggs nor eaten their products, thanks to “enjoying” Coeliac disease, the gluten thing. But Greggs' sales increase was nothing to do with the British public overwhelming their already hard working outlets, but rather due to the company opening more Greggs outlets.
This has certainly contributed to a perceived increase in sales but mainly due to their store count increasing by nearly 10% rather than existing branches – already suffering from higher wage costs and inflationary pressures – doing particularly well. As a result, we’re a little cynical over the company's immediate prospects.
From a chart perspective, we are already showing the share as being on a cycle to 1,769p and perhaps a bottom. With the low of 1,784p on Tuesday, in a world of unicorns and unending optimism, we’d be happy to suggest this drop was close enough to such a target as 1,769p.
Unfortunately, such an attitude would ignore the price already being parked below the read uptrend since 2020, and then gapped below our Red uptrend below. This behaviour gives a pretty thorough inclination to believe the market hasn’t yet finished grinding Greggs into the ground. We do not expect a real immediate bounce.
Now below 1,769p looks capable of entering a cycle down to 1,333p next with our secondary, if broken, at 1,257p. The proximity of both target numbers tends to imply a bounce should be anticipated, especially due to the target levels sitting comfortably above the lows of 2020. In addition, below 1,257p would enter a twilight zone where an ultimate and unlikely drop target of 612p awaits.
If things were to attempt emergency surgery to stop the rot, above 2,100p would imply the potential of coming movements to 2,512p with secondary, if bettered, at 2,685p. This seems unlikely.
Source: Trends and Targets. Past performance is not a guide to future performance.
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea.
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