Credit Suisse sees "signs of stability" at Premier Foods

6th Jan 2015 11:47

Upside risk at Premier Foods remains substantial, according to Credit Suisse which highlighted "signs of stability" in the food producer's sales.Credit Suisse cited Nielsen industry data as showing that sales were down 0.7% over the four weeks to 6 December and 0.5% lower over the last 12 weeks. This compared to the 5.4% decline recorded by Premier Foods in the first nine months of 2014."We think we can track circa 45% of Premier's sales through Nielsen scanning data, and the series thus far has been a pretty good read for the group numbers," the bank said."In the latest four weeks cake sales look to have responded well to the TV campaign posting an impressive 6.5% growth with good share gains, but soup (-13%) and sauces (-9.5%) remain weak."The bank retained its 'outperform' rating for the stock with a 70p target price, despite the recent impact on the business from the struggling supermarket industry."The equity is highly geared into stability/growth in [profits], albeit the group has yet to demonstrate this. But if it can, we believe the upside remains significant."The stock was up nearly 3% at 32.68p by 11:46.