Greggs to double by 20269 Jan 2024 12:48
My DD on Greggs, double by 2026: https://www.youtube.com/watch?v=FBC34eg0184&t=1s
Here's why you need to watch Greggs stock:
1. Greggs has gone from 1700 stores to 2400 in the last 10 years. A 40% increase.
2. They have gone from earning 22k per store to 66k per store. A 300% increase in OPERATING income.
3. They have 0 debt. ZERO. They grow with cash only because they make too much.
This happened thanks to a shift in their strategy from being a bakery first and foremost, to food on the go. This happened 10 years ago.Greggs, despite being fast food on the high street, have more in common with $KO (Coca-Cola) than $MCD. Everything is made in enormous warehouses and then shipped to their 2400 stores.
This is a growth stock to its core.
I estimate doubling in value at 2026 based on 3 things:
1. Store growth 4% annually (median is 5%).
2. Store earnings growth at 6% annually (median is 12%).
3. PE to remain at 20.
If the price drops I will move from 2-3% to 3-5% equity. PE of 10 in 2026 right now will mean would mean just a 15% rise.
I'm willing to take that risk for 2 reasons.
1. My projections dicount growth by well over 50%.
2. The lack of competition for price / quality / convinience.