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Liberum upgrades Irn-Bru maker AG Barr to 'buy'
4th May 2020 07:46
(Sharecast News) - Liberum upgraded its stance on Irn-Bru maker AG Barr to 'buy' from 'hold' on Monday, as it said the 30% drop in the share price was overdone and that it is a resilient, defensive, recovery play.
The broker, which upped its price target to 625p from 580p, said the combination of swift action by management and the transformation programme that started in September 2019 "provide resilience and flexibility for these unprecedented times".
"The positioning of its brands, price and value remain crucial as the group navigates some meaningful channel and product shifts," it said, adding that the resilience shown in previous downturns should provide confidence.
Liberum said the company's balance sheet is strong and there is enough liquidity even if lockdown goes into CY2021.
"Modelling all the cash flow dynamics through we can see that debt peaks around ?3m in June-20 with trough headroom of ?57m of liquidity," Liberum said. "This provides a significant amount of liquidity considering the levers at the group's disposal."
The broker, which upped its price target to 625p from 580p, said the combination of swift action by management and the transformation programme that started in September 2019 "provide resilience and flexibility for these unprecedented times".
"The positioning of its brands, price and value remain crucial as the group navigates some meaningful channel and product shifts," it said, adding that the resilience shown in previous downturns should provide confidence.
Liberum said the company's balance sheet is strong and there is enough liquidity even if lockdown goes into CY2021.
"Modelling all the cash flow dynamics through we can see that debt peaks around ?3m in June-20 with trough headroom of ?57m of liquidity," Liberum said. "This provides a significant amount of liquidity considering the levers at the group's disposal."