Greggs PLC (LSE:GRG) has prompted fresh optimism from analysts after stronger-than-expected sales growth suggested pressure on customer volumes may be easing, with some brokers now pointing to the potential for future share buybacks.
The bakery chain reported like-for-like sales growth of 2.5% for the first 19 weeks of 2026, accelerating to 3.3% in the most recent 10 weeks despite tougher comparisons and a still uncertain consumer backdrop.
JPMorgan said the update pointed to “early signs of sequential volume improvement”, with trading ahead of both broker and wider market expectations.
The bank said Greggs appeared to be “on the right path” towards an inflection in cash flows and shareholder returns.
Management commented that cash flow momentum was improving, "flagging scope for potential buybacks in due course".
UBS described the first-quarter performance as “encouraging”, saying better sales momentum alongside weaker profit comparisons should support “good” progress in first-half earnings.
The Swiss bank kept its full-year profit forecasts broadly unchanged at £176 million, slightly ahead of consensus expectations of £172 million, but said current guidance for profits to remain broadly flat now looked conservative.
UBS added that Greggs shares were trading on around 12 times earnings, well below their pre-pandemic average multiple of 19.4 times.
If there is further LFL momentum, with "easy" comparatives for the second and third quarter, could drive upgrades and a potential re-rating.
Not all analysts were convinced. Deutsche Bank continued to rate the shares “sell”, noting that underlying customer volumes still appeared slightly negative once January’s 4% price increase was stripped out.