So far this year investors haven’t had any hesitation in buying Tate & Lyle shares.
Opening at £6.59, the stock has been pretty consistent in its gains, before picking up the pace in the last month or so. Tate & Lyle shares PLC now sits at a current trading price, and 2 and a half-year peak, of £7.94.
The company kept things pretty vague in February’s third quarter update. Group adjusted pre-tax profit in constant currency for the 3 months to 31st December may have been ‘ahead of the comparative period’, but no hint was given as to by how much.
Its Food & Beverage Solutions division saw higher adjusted operating profit, with ‘volume growth in line with the first half’, where they rose 4%. Sucralose volumes were higher thanks to a programme to optimise production at its Alabama facility, helping adjusted operating profit sneak ‘slightly ahead’ of last year. The Primary Products arm was the sole part of the business to see adjusted operating profit go in the wrong direction, as weaker demand in North American sweeteners led to lower volumes.
The main takeaway from the details-light Q3 statement was that Tate & Lyle is expecting earnings per share in constant currency growth to be in a mid-single digit range, though ‘towards the lower end’ due to energy and transportation cost inflation and a year of strong commodities performance.
Analysts, meanwhile, are expecting the company to post a slight improvement in adjusted pre-tax profit on Thursday, from £301 million to £303 million year-on-year, with adjusted diluted earnings per share at 51.1p, roughly a 2% increase on 2018. Investors will also want to hear of any acquisitions given that CEO Nick Hampton was talking up the prospect of such at the end of April.
Tate & Lyle shares have a consensus rating of ‘Hold’ alongside an average target price of £7.26.
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