Greggs plc Just Beat EPS By 11%: Here's What Analysts Think Will Happen Next

It's been a sad week for Greggs plc (LON:GRG), who've watched their investment drop 13% to UK£18.17 in the week since the company reported its yearly result. Revenues were UK£2.0b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of UK£1.50 were also better than expected, beating analyst predictions by 11%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Greggs

Taking into account the latest results, the most recent consensus for Greggs from twelve analysts is for revenues of UK£2.18b in 2025. If met, it would imply a decent 8.4% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to sink 11% to UK£1.35 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£2.20b and earnings per share (EPS) of UK£1.38 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

It might be a surprise to learn that the consensus price target fell 11% to UK£25.68, with the analysts clearly linking lower forecast earnings to the performance of the stock price. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Greggs at UK£34.50 per share, while the most bearish prices it at UK£13.30. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Greggs' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 8.4% growth on an annualised basis. This is compared to a historical growth rate of 17% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.0% annually. Even after the forecast slowdown in growth, it seems obvious that Greggs is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Greggs' future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Greggs going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Greggs (1 is concerning!) that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.