Exane BNP upgrades Tate & Lyle; says it's turning a corner

27th Jul 2015 14:39

(ShareCast News) - Exane BNP Paribas upgraded Tate & Lyle to 'neutral' from 'underperform' but cut its price target to 525p from 540p.The broker noted that the shares have fallen by around 20% since the bank's mid-April downgrade and the stock's relative valuation has pulled back markedly over the past quarter.Its analysts said consensus earnings estimates have fallen significantly and now look reasonable, while the business mix has improved.They pointed out that Speciality Food Ingredients ex Sucralose now accounts for around 60% of group earnings before interest, which is around 2500 basis points above the full-year 2011-13 level."Consensus expectations have been materially pruned (FY17 earnings per share estimates EPS declined around 10% since the end of April) and as a consequence we now find ourselves in the relatively rare position of having Tate estimates which are broadly consensual," said Exane.At 14:21, Tate shares were up 1.6% at 513.58p, outperforming a weaker London market.