Berenberg raises target price on Premier Foods
Analysts at Berenberg raised their target price on food manufacturer from 250.0p to 270.0p on Monday as the company's equity thesis re-brand continues.
Berenberg said the evolution of the Premier Foods equity thesis had given investors a reason to question what lies ahead.
"Premier Foods' history has been characterised by significant debt burden due to substantial bank debt and a large pension deficit," said Berenberg.
However, the analysts stated that Premier Foods has now moved past these issues, noting that its leverage has "markedly diminished" and said its cashflow generation has "expanded materially".
"Investors have rightly shifted their focus from the company's de-leverage potential and turnaround ability to what a likely use of Premier Foods' excess capital may be," said the German bank.
Berenberg also reiterated its 'buy' rating on the stock.
Reporting by Iain Gilbert at Sharecast.com
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