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On Friday, Deutsche Bank (ETR:DBKGn)’s analyst Virginie Boucher-Ferte adjusted the price target for Tate & Lyle Plc (LON:TATE:LN) (OTC:TATYY), reducing it to GBP 8.00 from the previous GBP 9.50. Despite the lowered price target, the firm maintains a Buy rating on the stock.
The adjustment follows a recent meeting where Tate & Lyle’s management emphasized the completion of the company’s transformation after selling Primient and acquiring CP Kelco. Management highlighted Tate & Lyle’s solid track record in strategic and financial delivery, with a compound annual growth rate (CAGR) of +7% in revenue and +10% in EBITDA over the past five years, an increase in margins by 350 basis points, and free cash flow (FCF) of GBP 700 million.
The company is now aiming to accelerate revenue growth, supported by potential revenue synergies from the CP Kelco acquisition. However, concerns have been raised regarding the growth forecast for FY 26 due to tariff headwinds impacting starch exports from the US to China.
Deutsche Bank suggests that there is room to increase sales in the Solutions segment, which currently represents 21% of the new business, below the medium-term target of 32%. The underperformance in this area is partly attributed to market conditions, but the integration of Tate and CP Kelco’s portfolios is expected to bolster further sales in Solutions.
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