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Berenberg ups C&C Group to 'hold', lowers TP
16th Apr 2020 10:10
(Sharecast News) - Analysts at Berenberg slashed their target price on brewer C&C Group on Thursday but upped their rating on the group from 'sell' to 'hold'.
Berenberg highlighted that C&C Group's share price had fallen by roughly 50% from its highs in early January since the government shut down the UK's bars, restaurants and pubs to help manage the effects of Covid-19, a move the analysts said was "understandable" given that the on-trade represented around 80% of the firm's net sales.
"With the brewer withdrawing mid-term guidance and taking immediate actions in the debt market, investor focus has unsurprisingly been on short-term liquidity requirements," said Berenberg.
However, the German bank's underlying view on the firm was unchanged and said it thinks C&C's funding levels should remain "sufficient", despite undoubted immediate-term stresses.
"Our monthly cash flow model shows that, in the worst month of H1 2021E, net debt peaks at c€305.2m, which is still within the c€550m of immediate-term liquidity (across a range of facilities) that C&C has at its disposal," concluded Berenberg.
Berenberg highlighted that C&C Group's share price had fallen by roughly 50% from its highs in early January since the government shut down the UK's bars, restaurants and pubs to help manage the effects of Covid-19, a move the analysts said was "understandable" given that the on-trade represented around 80% of the firm's net sales.
"With the brewer withdrawing mid-term guidance and taking immediate actions in the debt market, investor focus has unsurprisingly been on short-term liquidity requirements," said Berenberg.
However, the German bank's underlying view on the firm was unchanged and said it thinks C&C's funding levels should remain "sufficient", despite undoubted immediate-term stresses.
"Our monthly cash flow model shows that, in the worst month of H1 2021E, net debt peaks at c€305.2m, which is still within the c€550m of immediate-term liquidity (across a range of facilities) that C&C has at its disposal," concluded Berenberg.