Greggs Share Price Rebounds As Growth Strategy Holds Off Profit Warning Fears

Greggs share price returned to the upside on Friday, gaining 4.2% in late morning trading to read 1,748p at the time of writing. The company’s statement on Wednesday that high summer temperatures had hit its June sales brought headwinds, with investors concerned about what it means for its Q3 earnings. Greggs share price slid to 52-week lows of 1,645p on the heels of the news, with the stock ending the day’s session at -15.19%.

Beyond the summer hit, Greggs also signaled pressure from high operational costs, including renovations. It highlighted high taxes, rising wages and food inflation as primary drivers of the spike, which will likely eat into its margins. Despite the current headwinds, the company’s H1 performance was impressive, with a 2.6% uptick in like-for-like sales and 6.9% rise in revenue to £1.03 billion.

However, that momentum is unlikely to extend into the summer, and could bring downward pressure on Greggs share price in the medium-term. With temperatures rising as high as 35 degrees Celsius, most consumers are staying away from hot meals, opting instead to buy cold drinks. That raises the prospect that Greggs’ profits this year could come below the £195 million reported in 2024.

Despite the current downside, Greggs’ core fundamentals, including its brand strength, menu diversity and growth plans are still in play. For instance, it has not shifted from its plans to expand to 3,000 stores by the end of the year. Meanwhile, the current dip will likely present a buying window for long-term investors.

Greggs Share Price Prediction

The momentum on Greggs share price calls for further upside above the pivot mark at 1,740p. That will likely see primary resistance established at 1,757p. However, an extended control by the buyers will breach that barrier and could push the action higher to test 1,775p.

Alternatively, the stock could break below 1,740p and shift the momentum to the upside. That will likely see primary support established at 1,723p. Action below that level will invalidate the upside narrative. Also, the resulting momentum could push the price lower and test 1,704p.

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