Broker snap: Premier Foods still in a pickle

1st Jul 2011 12:58

After yesterday's profits warning from Premier Foods, Panmure Gordon has slashed its full-year profit estimate for the current year and lowered its target price for the Hovis bread and Branston pickle maker.Panmure Gordon notes that the company regards the causes of its £35-40m downgrade in profits guidance as non-recurring events, and expects an improvement in performance in the second half of the year, but the broker is unconvinced that the company can make up the lost ground before the year-end.It chops its profit before tax forecast to £115m from £153m previously, and cuts its target price from 27p to 22p. With the shares barely a couple of pence below their 52-week low of 16p, the broker is sticking with its recommendation for holders to retain the shares.