Barclays lifts Tate & Lyle to 'overweight'
Tate & Lyle
633.00p
16:45 24/04/24
Barclays upgraded its stance on shares of Tate & Lyle on Tuesday to ‘overweight’ from ‘equalweight’ and hiked the price target to 875p from 700p, highlighting its increasing resilience.
Food Producers & Processors
8,121.07
17:09 24/04/24
FTSE 250
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17:09 24/04/24
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FTSE All-Share
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16:44 24/04/24
The bank said Tate’s circa 60% price-to-earnings discount to European Ingredients peers is unjustified given its growth momentum in Food & Beverage Solutions (FBS) and increasingly apparent resilience in Primary Products.
"The better-than-feared outcome of the calendar 2021 high fructose corn syrup pricing round that Tate presented last week at its Q3 21 trading statement is a key factor in our +5-6% group FY22e and FY23e EBIT upgrades, as well as our stronger FBS growth assumptions," Barclays said.
This leaves the banks’ FY24 forecasts 4% ahead of consensus.
"We see increasing long-term potential for an acceleration in diversification of corn wet milling volumes from HFCS towards bio-based ingredients to drive a structural re-rating," it said.
At 1335 GMT, the shares were up 2% at 717.60p.