Berenberg Bank analyst Sam Darbyshire downgraded the rating on Tate & Lyle (TATE – Research Report) to a Hold yesterday, setting a price target of p600.00.
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Sam Darbyshire has given his Hold rating due to a combination of factors affecting Tate & Lyle’s financial outlook. The company’s recent trading statement highlighted ongoing pricing pressures and led to a reduction in its fiscal year 2025 guidance, projecting mid-single-digit revenue declines and EBITDA growth at the lower end of the expected range. This outlook suggests potential weakness extending into fiscal year 2026, prompting a downward revision of EBITDA forecasts and a reduced price target for the stock.
Moreover, the anticipated 3% decline in price/mix for the Food & Beverage Solutions division and the CP Kelco acquisition, alongside expected growth in volume, points to modest organic growth. Despite these challenges, cost savings from the CP Kelco acquisition are projected to offset some margin contractions. Additionally, while sucralose sales have shown strong growth, this is expected to taper off in the coming quarters. Overall, the limited near-term growth opportunities and the adjusted financial forecasts justify the Hold rating.
In another report released yesterday, Barclays also maintained a Hold rating on the stock with a £7.50 price target.
Based on the recent corporate insider activity of 22 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of TATE in relation to earlier this year.