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Highlights
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Positive Rating Reaffirmed: Deutsche Bank has maintained a "buy" rating for Tate & Lyle PLC, increasing its price target to 850 pence from the previous close of 669 pence.
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Acquisition Progress: The acquisition of CP Kelco is on track to complete by the end of 2024, aided by recent changes to UK listing rules that eliminate the need for a shareholder vote.
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Financial Performance Insights: While revenue growth for the full year is expected to be slightly below last year, EBITDA growth is forecasted between 4-7%, indicating stable trading performance.
Deutsche Bank has reiterated its "buy" rating for Tate & Lyle PLC {LSE:TATE} , increasing the price target to 850 pence, up from the last close of 669 pence. This positive outlook is underpinned by the anticipated completion of the company's acquisition of CP Kelco by the end of 2024, following recent amendments to UK listing rules that have removed the necessity for a shareholder vote.
In its assessment, Deutsche Bank noted that Tate & Lyle's trading performance remains in line with expectations. Revenue growth for the full year is projected to be slightly below that of the previous year; however, the bank forecasts an EBITDA growth of 4-7%, reflecting a stable operational environment.
Moreover, CP Kelco's performance has stabilized, with volume significantly surpassing the previous year's figures. Deutsche Bank anticipates that the return on investment from the acquisition will exceed Tate & Lyle's cost of capital by the fifth year post-completion, positioning the company for long-term financial success.
Tate & Lyle has also made progress on its share buyback initiative, having completed £102 million of its planned £215 million program, signaling confidence in its financial stability and future prospects. In the trading session, Tate & Lyle shares were up by 3.5 pence, reaching 672.5 pence, as market sentiment remains optimistic regarding the company’s growth trajectory and strategic initiatives.
