Prediction: this FTSE 250 stock could bounce back on Tuesday

Greggs (LSE:GRG) is set to provide a trading update on Tuesday (20 May). And I think investors have reasons to be positive about what the FTSE 250 company is going to say.
So far, the stock has fallen around 30% since the start of the year. But I’ve seen recent signs things might be about to look up – at least in the short term.
Why has the stock been falling?
At first sight, it’s not entirely obvious why the stock has been falling. Total sales in 2024 grew 11%, pre-tax profits were up 13%, and earnings per share climbed 11% – that’s good, right?
Well yes, but while the headline news is good, there are some slightly concerning aspects. One is that around half of that growth came from opening new stores, which the firm can’t do forever.
Like-for-like sales (which measures revenues adjusted for changes in store count) came in at 5.5%. And the even bigger concern is that this collapsed to just 1.7% in the first nine weeks of 2025.
That’s not good at all and I think it’s the main reason the stock has been falling in 2025. But there are signs things might have been improving over the last couple of months.
Positive signs
It’s not just Greggs that has been struggling with weak sales recently. The UK high street in general suffered from a lack of footfall in the last quarter of 2024.
One reason for this was unusually bad weather. That might sound like an unbelievably bad excuse, but several companies have said it made a difference to their results towards the end of 2024.
For whatever reason, quite a few firms have been reporting more positive results in 2025. One example is JD Wetherspoon, where unusually good weather has been getting people to the pub.
Whether it’s the sun or another reason, trading conditions seem to be improving. As a result, I think Greggs could well report like-for-like sales growth of more than 1.7% and the stock could rise as a result.
Long-term investing
Greggs has posted a couple of disappointing reports this year, but I’m expecting a stronger one in the coming week. The big question for investors, though, is what the long-term future looks like.
The last few months have illustrated the firm’s dependence on high street footfall. Given this, maybe the unpredictable nature of the UK’s weather is a risk to be taken seriously.
In any event, like-for-like sales growth is going to determine the company’s success over time. And it’s also going to be key to investment returns.
At a price-to-earnings (P/E) ratio of around 13, the firm might not need to achieve much in terms of growth to be a good investment. So long-term investors might think it’s worth a closer look.
A stock to buy now?
I’m a big fan of companies that offer their customers better value than their rivals and this is certainly true of Greggs. Importantly, the firm has the economies of scale to back up its low-cost offerings.
I think that could be a resilient business model over time and it’s worth considering at today’s prices. But if – as I’m expecting – the stock starts to bounce back on Tuesday, it could be a different story.
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Stephen Wright has positions in J D Wetherspoon Plc. The Motley Fool UK has recommended Greggs Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.