Broker snap: Investec re-starts A.G. Barr at buy

21st Mar 2013 13:08

Drinks manufacturer A.G. Barr showed good momentum in its sales during fiscal year 2013, as the company concentrates on building distribution from its strong regional positions. Combined with its reputation for delivery, cash generation and growth opportunities analysts at Investec believe that the shares place at the top of the rating range for branded beverage companies.Hence, and on a stand-alone basis, they feel that can justify a share price of 517p.That comes after the merger with Britvic was placed on the 'back-burner', although hopefully only temporarily, so that the company is pushing forwards on its growth plans alone. As such, if a probability-weighted contribution from the potential merger - of 45p per share - is added then the estimated price target rises to 562p. Also to be had in account is the company's still strong balance sheet.For all of the above reasons Investec has decided to reinitiate coverage of the stock with a 'buy' recommendation. AB