Tate & Lyle (TATE)

Sector:

Food

Index:

FTSE 250

665.20p
   
  • Change Today:
      3.20p
  • 52 Week High: 801.40
  • 52 Week Low: 530.20
  • Currency: UK Pounds
  • Shares Issued: 468.42m
  • Volume: 731,348
  • Market Cap: £3,115.93m
  • RiskGrade: 107

Jefferies sweetens rating on Tate & Lyle

By Abigail Townsend

Date: Monday 09 Dec 2019

LONDON (ShareCast) - (Sharecast News) - Jefferies has upped its recommendation on Tate & Lyle, but continues to sound a note of caution about the impact of near-term political uncertainty and potentially "uncompelling" earnings growth.
The bank has a 'hold' rating on the sugar and sweetener specialist, up from 'underperform'. The price target has also been lifted, to 770p from 635p.

Equities analyst Martin Deboo explained: "We abandon our 'underperform' case in the aftermath of [a] better-than-expected half-year and subsequent positive indications on the 2020 pricing rounds in high fructose corn syrup.

"The stand-out result at the half-year was 11% profit growth at constant foreign exchange in the higher PER segment of Food & Beverage Solutions (FBS). While volumes were flat against at toughening comparison, a 4% positive price/mix, allied to cost discipline, delivered the result.

"Tate & Lyle is guiding to something similar in the second half; we go for +9% profit growth. The second half will continue to benefit from the positive mix benefit from withdrawing from lower margin texturants in EMEA."

However, Deboo also argued that while the FTSE 250 firm was an "improving business" it remained "underwhelming".

"Upgraded numbers equate to flat EPS growth in the 2020 at constant exchange rates, related to guidance of 'broadly flat to low single-digit'," he said. "So we no longer see downside risk to guidance or consensus.

"However, Tate & Lyle is still struggling to deliver positive earnings momentum, with the high growth/high PER component - FBS - only 40% of profits and lower growth/lower PER components - Sucralose & Primary - 60%.

"What would turn us more positive would be further evidence of sustained volume and profit growth in FBS and further good news on sweetener economics.

"However, going the other way is downside foreign exchange risk to earnings from the pound against the dollar, in the event of a Conservative victory in the UK general election. The strong balance sheet affords some M&A salvation, but we prefer to look at that on its merits, when the time comes."

Last month, Tate & Lyle beat forecasts to report a 45% surge in first-half profits, to £164m, while revenues rose 7% to £1.4bn.

However, the company left its full-year guidance unchanged, citing "challenges" in the US and the fact it was only just starting to sign the latest round of annual contracts.

Shares in Tate & Lyle were largely flat by 1115 GMT, trading around 744.60p.

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Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

Note 2: RiskGrade figures are provided by RiskMetrics.

 

Tate & Lyle Market Data

Currency UK Pounds
Share Price 665.20p
Change Today 3.20p
% Change 0.48 %
52 Week High 801.40
52 Week Low 530.20
Volume 731,348
Shares Issued 468.42m
Market Cap £3,115.93m
RiskGrade 107

Tate & Lyle Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
3.89% below the market average3.89% below the market average3.89% below the market average3.89% below the market average3.89% below the market average
37.93% below the sector average37.93% below the sector average37.93% below the sector average37.93% below the sector average37.93% below the sector average
Price Trend
1.94% above the market average1.94% above the market average1.94% above the market average1.94% above the market average1.94% above the market average
10.34% above the sector average10.34% above the sector average10.34% above the sector average10.34% above the sector average10.34% above the sector average
Income
68.35% above the market average68.35% above the market average68.35% above the market average68.35% above the market average68.35% above the market average
25.00% above the sector average25.00% above the sector average25.00% above the sector average25.00% above the sector average25.00% above the sector average
Growth
1.41% below the market average1.41% below the market average1.41% below the market average1.41% below the market average1.41% below the market average
31.03% above the sector average31.03% above the sector average31.03% above the sector average31.03% above the sector average31.03% above the sector average

What The Brokers Say

Strong Buy 2
Buy 0
Neutral 8
Sell 0
Strong Sell 1
Total 11
neutral
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

Tate & Lyle Dividends

  Latest Previous
  Final Interim
Ex-Div 18-Jun-20 21-Nov-19
Paid 31-Jul-20 03-Jan-20
Amount 20.80p 8.80p

Trades for 30-Sep-2020

Time Volume / Share Price
16:35 404,892 @ 665.20p
16:29 93 @ 666.40p
16:29 88 @ 665.80p
16:29 11 @ 665.80p
16:29 600 @ 666.20p

Tate & Lyle Key Personnel

CEO Nick Hampton
Chair Gerry M Murphy
CFO Imran Nawaz

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