Broker snap: Citi reiterates neutral rating for Tate & Lyle

3rd Nov 2011 14:41

Citi has kept its neutral stance on FTSE 100 sweeteners firm Tate & Lyle but highlighted the firm's strong first half.Operating profits of £194m were well ahead of Citi's forecast of £181m, while earnings per share came in 8% ahead. Also, the broker estimates that consensus forecasts could be increased by some 4% this year.However, "Sucralose competition is a threat and could cause both margins and pricing to erode more quickly than forecast," the broker said.Citi says that risks to its 625p target price on both the upside and the downside are net corn costs, high-fructose corn syrup pricing and energy prices. "With c80% of profits coming from the US, FX is also a risk."Shares in Tate & Lyle were up 5.8% at 684.5p by 15:52.BC