On Monday, Deutsche Bank adjusted its outlook for Cranswick Plc (CWK:LN), a UK-based food producer, by increasing its price target to £51.50 from £49.50. The firm maintained its Buy rating on the stock. This revision follows Cranswick's announcement that its performance for the 26 weeks leading up to September 28 has exceeded expectations. The company now anticipates its adjusted profit before tax (PBT) for the year to align with the higher end of market forecasts.
The upgrade in the price target is a result of Cranswick's robust trading, particularly in its core UK food business, which showed a like-for-like revenue growth of 6.4% in the first quarter of the fiscal year 2025. The growth has been attributed to the company's strong volume growth and its focus on delivering high service levels, quality, and innovation.
Additionally, a significant contribution to the positive outlook comes from Cranswick's farming operations, which have benefited from lower feed costs, stable pig prices, and the integration of recently acquired farms.
Deutsche Bank has raised its estimate for Cranswick's adjusted PBT for the fiscal year 2025 by approximately 5% to £191.5 million. The bank's analyst cited the company's strong performance and its positioning for continued growth, particularly as it enters the critical Christmas trading period. The positive adjustments reflect confidence in Cranswick's strategy and market performance.
The analyst from Deutsche Bank highlighted the company's ability to sustain volume growth within its core UK food business as a key driver of the optimistic forecast. The better-than-expected contribution from its pig farming operations due to favorable trading conditions has also played a significant role in the upward adjustment of the company's financial projections.
Cranswick's trading update indicates that the company is well-prepared to capitalize on the upcoming holiday season, a time when food consumption traditionally increases. The company's successful navigation of market conditions and strategic growth initiatives have led to the positive revision of its price target by Deutsche Bank.
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