Fact based stock research
Greggs (LSE:GRG)

GB00B63QSB39

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Greggs stock research in summary

corporate.greggs.co.uk

ANALYSIS: With an Obermatt Combined Rank of 38 (worse than 62% compared with investment alternatives), Greggs (Restaurants, United Kingdom) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Greggs are low in value (priced high) with a consolidated Value Rank of 20 (worse than 80% of alternatives) and show below-average growth (Growth Rank of 43) but are safely financed (Safety Rank of 79), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 38, is a hold recommendation based on Greggs's financial characteristics. As the company Greggs's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 20) and low growth (Obermatt Growth Rank of 43), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 79) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	20
Growth Rank	43
Safety Rank	79
Combined Rank	38

Country	United Kingdom
Industry	Restaurants
Index	FTSE All Shares, FTSE 250, FTSE 350, Employee Focus EU
Size class	Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Greggs

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	1	28	20	20
GROWTH
GROWTH	97	100	49	43
SAFETY
SAFETY	48	80	90	79
SENTIMENT
SENTIMENT	n/a	100	66	^new
360° VIEW
360° VIEW	n/a	98	65	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 29-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Greggs is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	1	28	20	20
GROWTH
GROWTH	97	100	49	43
SAFETY
SAFETY	48	80	90	79
COMBINED
COMBINED	44	90	63	38

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Greggs the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 20 (worse than 80% compared with alternatives), Greggs shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Greggs. Price-to-Sales is 45 which means that the stock price compared with what market professionals expect for future profits is higher than 55% of comparable companies, indicating a low value concerning Greggs's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 20, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Greggs. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 26 and Dividend Yield, which is lower than 54% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 20, is a sell recommendation based on Greggs's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Greggs? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Greggs? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Greggs may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	11	40	41	45
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	30	47	29	26
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	3	17	17	20
DIVIDEND YIELD
DIVIDEND YIELD	30	70	67	46
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	1	28	20	20

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Greggs; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 43 (better than 43% compared with alternatives), Greggs shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below-average for Greggs. While Sales Growth ranks at 79, professionals currently expect the company to grow more than 79% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 44, which means that, currently, professionals expect the company to grow its profits less than 56% of its competitors, and Capital Growth has a low rank of 11. Historic stock returns were also below average with a current Stock Returns rank of 45 which means that the stock returns have recently been below 55% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 43, is a hold recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance isn't stellar here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	81	29	81	79
PROFIT GROWTH
PROFIT GROWTH	70	96	29	44
CAPITAL GROWTH
CAPITAL GROWTH	n/a	98	44	11
STOCK RETURNS
STOCK RETURNS	98	85	41	45
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	97	100	49	43

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Greggs.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 79 (better than 79% compared with alternatives) for 2024, the company Greggs has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Greggs is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for Greggs. Leverage is at 67, meaning the company has a below-average debt-to-equity ratio. It has less debt than 67% of its competitors. Refinancing is at a rank of 54, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 54% of its competitors. Finally, Liquidity is also good at a rank of 88, which means that the company generates more profit to service its debt than 88% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 79 (better than 79% compared with alternatives), Greggs has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. Investors may not have a debt issue with Greggs but they should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	62	67	67	67
REFINANCING
REFINANCING	18	59	59	54
LIQUIDITY
LIQUIDITY	80	70	94	88
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	48	80	90	79

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Greggs and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	66	51	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	83	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	100	69	^new
MARKET PULSE
MARKET PULSE	n/a	74	54	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	100	66	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Greggs.
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