Broker snap: Investec ups target for PZ Cussons

7th Dec 2012 11:09

Investec has raised its price target for cosmetic products group PZ Cussons from 300p to 335p after the firm confirmed that it is to return to profit growth in the first half.In a trading update on Thursday, the Imperial Leather soap maker said performance for the first half of the year had been in line with management expectations. "PZ Cussons looks set to release a solid result for 1H, with profit before tax ahead by 10%, marking its return to profit growth after last year's challenges," said analyst Nicola Mallard.She said that while trading conditions remain challenging for the group, with revenue expected to be in line with last year, much of the profit growth is driven by self-help "with restructuring projects now starting to pay back and supplemented by some reduction in raw material costs".However, much depends on how Nigeria (described as "fragile" by PZ Cussons) performs in the second half, Mallard said. The broker has maintained its 'hold' recommendation for the stock.BC