Berenberg upgrades Cranswick to 'buy' following site visit

22nd Sep 2026 09:51

(Sharecast News) - Analysts at Berenberg upgraded Cranswick from 'hold' to 'buy' on Tuesday, saying a visit to the group's Suffolk poultry facility underlined its growing market leadership and the widening competitive moat around the business.

Berenberg, which also lifted its price target to 6,080p from 5,770p, said Cranswick's Eye site - described as the most advanced poultry‑processing facility in Europe - showcased the scale of investment underpinning the group's position in UK food manufacturing.

The plant currently processes around 1.6m birds a week and was running at roughly 95% capacity, with additional capex set to lift output to 2m birds by April 2027. Management believes replicating Cranswick's footprint would cost around £2bn, highlighting the barriers to entry for competitors.

Berenberg highlighted a supportive demand backdrop, with UK poultry consumption expected to rise 3% to 4% a year and pork by 1% to 2%, while supply remains constrained.

The German bank also argued that consensus forecasts underestimate the returns from upcoming capex. Using historical pre‑tax return on capital expenditure assumptions, it estimates cumulative underlying earnings of £98m from the investment pipeline, compared with consensus expectations for £64m of EBIT growth between FY26 and FY30.

Berenberg also pointed to Cranswick's recent £200m planning application for further poultry capacity as a potential catalyst.

After a two‑year de‑rating, Berenberg said Cranswick now trades on 15.7x FY27 earnings, with the bank forecasting a three‑year earnings per share compound annual growth rate of 6%, rising to 10.7% if capex delivers group‑level ROCE within three years, alongside a 2.5% dividend yield and scope for a valuation re‑rating.

Reporting by Iain Gilbert at Sharecast.com