Broker snap: Panmure sweetens target for Tate & Lyle

9th Feb 2012 11:43

In spite of the negative market reaction to Tate & Lyle's third quarter trading update on Thursday, Panmure Gordon has raised its target price for the stock from 645p to 690p, saying that there is "better visibility now on fiscal 2013".Panmure Gordon says that the sweeteners group's statement was in line with expectations, with Speciality Food Ingredients seeing a lower rate of volume growth than the first half as expected. In Bulk Ingredients, the US is benefitting from good domestic and Mexican demand, while ethanol returns have weakened and volumes were lower in industrial starches, the broker notes."Tate's Q3 IMS was pretty much exactly as expected, including the comment that the HFCS pricing round had been concluded successfully, with a modest increase in unit margins," the broker said.As such, Panmure has raised its 2013 earnings per share forecasts from 55.2p to 56.8p to reflect a slightly higher forecast for bulk ingredients and a lower estimate for interest costs.The broker kept a hold rating on the stock.Shares had fallen 3.31% to 672p in mid-morning trade.