Tate & Lyle PLC (TATE:LSE): Last: 519.00, up 17 (+3.39%), High: 526.50, Low: 518.00, Volume: 982.90k BE Deboo at Jefferies turns buyer. BE Growing signals of improving CWM economics lead us to upgrade numbers, and view. The ’16 HFCS pricing round in the US has started early and robustly: a sign of confidence. Experience shows that HFCS is a barometer of wider SFI & Bulk economics and that when the cycle turns, it can do so quickly, and dramatically. With the shares visiting 500p and yielding 5.6%, we turn positive. Opening shots in the pricing round signal confidence…and rising margins. Reports indicate that pricing letters on HFCS for 2016 have been published – the earliest we can remember. Millers are asking for a 15-20% hike, in a climate of flat to falling corn costs. This signals healthily tight utilisation. It may not conclude quite this well, but it doesn’t need to, to sweeten Tate’s bottom line very nicely. BE Benefits Bulk directly, but a positive signal on SFI, too. We obsess on HFCS, unapologetically, not just because it’s now c.40% of profits but also because it’s a visible signal of the wider health of US Corn Wet Milling (CWM), which will account for over 80% of profits following the exit from Europe. There is strong correlation between Tate’s profits in SFI and Bulk and between both and HFCS margins. Complications: tolling, ethanol & Sucralose. 75% of Tate’s HFCS is on de-risked tolling contracts, which moderates any upside, and they are still brewing 40m gallons of (unprofitable) ethanol. Yesterday’s acquisition of Splenda by Heartland might impact tabletop Sucralose volumes. So we skip the final couple of turns of our pencil sharpener. BE Q1 body language positive. Chairman Buying. We’ve been quiet since the Q1. Worth remembering, then, that ‘body language’ on the call – on Sucralose, Allulose, and life generally – was notably more positive, from a what has been a bruised and battered team. The Chairman has just bought 10,000 shares. Dividend provides strong underpin – we think it’s sustainable. Tate is yielding a juicy 5.5%. This is more or less covered by EastStarch proceeds in FY16. From FY17, it has to be funded organically and we have it 1.2x covered by cashflow. Tight but doable we think, in a climate of what should be rising profits & stable £:$ fx. Upgrading. Underlying momentum better than it looks. We upgrade FY16 by 4% and FY17 by 8% FY17 EPS growth is impacted by Europe exit reversal and a rising tax charge. Forecast 12% LFL EBIT growth is the truer measure of momentum for us.
<b>Insider Buying: Tate & Lyle PLC insider Purchases 10,000 Shares of Stock (TATE) August 25th, 2015</b> Tate & Lyle PLC (LON:TATE) insider Gershon,Peter purchased 10,000 shares of the firm’s stock in a transaction that occurred on Tuesday, August 25th. The shares were acquired at an average price of GBX 510 ($7.99) per share, for a total transaction of £51,000 ($79,912.25). The company also recently disclosed a dividend, which was paid on Friday, July 31st. Shareholders of record on Thursday, July 2nd were given a GBX 19.80 ($0.31) dividend. This represents a yield of 3.38%. The ex-dividend date of this dividend was Thursday, July 2nd. A number of research firms have recently weighed in on TATE. Numis Securities Ltd reaffirmed a “reduce” rating and set a GBX 545 ($8.54) price objective (down previously from GBX 563 ($8.82)) on shares of Tate & Lyle PLC in a research note on Tuesday, April 28th. Berenberg Bank lowered their target price on Tate & Lyle PLC from GBX 645 ($10.11) to GBX 625 ($9.79) and set a “hold” rating for the company in a report on Friday, May 29th. Liberum Capital restated a “sell” rating and issued a GBX 505 ($7.91) price objective on shares of Tate & Lyle PLC in a report on Friday, August 14th. Societe Generale upgraded Tate & Lyle PLC to a “buy” rating and set a GBX 620 ($9.71) price target for the company in a report on Thursday, July 30th. Finally, BNP Paribas cut their price objective on shares of Tate & Lyle PLC from GBX 550 ($8.62) to GBX 540 ($8.46) and set an “underperform” rating for the company in a research report on Friday, May 29th. Two equities research analysts have rated the stock with a sell rating, eleven have assigned a hold rating and three have issued a buy rating to the company. The stock currently has a consensus rating of “Hold” and an average price target of GBX 598.25 ($9.37). Tate & Lyle PLC (LON:TATE) traded up 0.89% during midday trading on Tuesday, hitting GBX 507.50. 1,909,139 shares of the stock were exchanged. The firm’s market capitalization is GBX 2.35 billion. The firm’s 50-day moving average price is GBX 525.15 and its 200 day moving average price is GBX 573.53. Tate & Lyle PLC has a 1-year low of GBX 501.18 and a 1-year high of GBX 744.50. Tate & Lyle PLC is a provider of ingredients and solutions to the food, beverage and other industries. The Company uses technology to turn raw materials into ingredients for its customers. These ingredients add taste, texture, nutrition and increased functionality to products. Its customers include industrial, animal feed, pharmaceutical and personal care markets. The Company operates in two segments namely Speciality Food Ingredients (LON:TATE) and Bulk Ingredients (BI). In SFI segment, the Company operates three categories: sweeteners, such as SPLENDA Sucralose and crystalline fructose;
14 Jul '15
Price has only just broken out of a large head and shoulders, projections of which are around 450p
12 Jul '15
For what it is worth
Credit Suisse upgraded Tate & Lyle to 'neutral' from 'underperform' following the recent underperformance that has seen the shares fall below its price target. CS noted that the shares have de-rated to 15 times this year's estimated earnings and the dividend offers further support.
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