(Sharecast News) - Analysts at Berenberg cut their target price on food ingredients manufacturer Treatt from 700.0p to 580.0p on Thursday as its "slow start" to FY24 resulted in a downgrade to full-year revenue growth guidance.
Berenberg noted that despite the downgrade to guidance, a "significant acceleration" in revenue growth was required in H2 to achieve both consensus and guidance estimates.
"Concerningly, revenue in its new markets segment declined year-on-year in H124, which comprises both coffee and China," said Berenberg.
However, the German bank noted that even with the decline in new markets revenue recorded in H1, it continues to expect that Treatt can exploit the opportunities in coffee and China to deliver an acceleration in growth across the medium-term.
Berenberg, which reiterated its 'buy' rating on the stock, added that Treatt trades on a roughly 19x 12-month forward price-to-earnings ratio, which was more than one standard deviation below its trailing five-year historical average.
Reporting by Iain Gilbert at Sharecast.com
Treatt (TET)