140 Target25 Jun 2020 07:55
Shore Capital says surging Premier Foods can double
Premier Foods (PFD), the maker of Mr Kipling cakes, has had a ‘transformational’ year thanks to coronavirus lockdown increasing demand, says Shore Capital.
Analyst Clive Black reiterated his ‘buy’ recommendation on the shares, which surged 14.9% to 68.5p yesterday.
He said the group had been ‘wandering around in zombie status for some years, burdened by overall indebtedness’ but underneath this ‘balance sheet millstone’ there has been ‘quite a good company seeking to show its true value for some time’.
Black said the group’s current position can ‘drive the re-rating much further still’.
‘We believe that Premier’s shares, which we placed on the “buy” roster on 1 April, have the scope to double again,’ he said.