Tate & Lyle Earnings Preview

Wednesday, 24th May 2017 15:07 - by Rajan Dhall

Tate & Lyle have had a great 2017 so far, the share price has risen 11.4% since the start of the year and 20% from the lows this year seen in late January. The British ingredients maker has recently said the NAFTA changes would impact company profit but it sees the disruptions as manageable, Mexico accounts for 10% of Co.'s earnings.

In one of his last comments CEO Javed Ahmed raised the Co.'s guidance and also stated that robust North American demand for sweeteners is leading to better than expected profits. One key thing to consider is the FX rates, Sterling's fall during the last earnings report boosted results by £15M this time round Sterling's revival could hit profits to have a detrimental impact.

The latest broker recommendations for the Co. are mixed as Numis Securities Ltd downgraded Tate & Lyle PLC from an “add” rating to a “hold” rating in a report on Wednesday, April 12th and a “Buy” rating reiterated by analysts at Deutsche who now have a GBP 875.00p price target on the stock.

From technical point of view, the 800p level looks to be providing heavy resistance and we are slightly above the value are but it looks like traders are trying test it before the release. The main point is price action is still bullish, consecutively making higher lows and higher highs on the 1 hour plus timeframes. If earnings are good we may see the 800p level tested but on the downside there are many sticking points that could hold price, most noticeably the 730p area.

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.