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On Tuesday, RBC Capital Markets adjusted its stance on Premier Foods Plc (LON:PFD:LN) (OTC:PFODF), downgrading the company’s stock rating from Outperform to Sector Perform, accompanied by a price target set at GBP2.20. The decision, as described by RBC Capital, comes after a thorough evaluation of the company’s recent full-year results and the acknowledgment of Premier Foods’ success in resolving critical issues and establishing a dependable business model.
The firm’s analysts have revised their forecasts for Premier Foods following the release of its full-year results. The slight decrease in the expected earnings per share (EPS) for 2026 is attributed to an anticipated rise in finance costs, which are forecasted to increase from £18.5 million in 2025 to between £23-25 million in 2026. This increase is primarily due to the refinancing of a low coupon bond.
Premier Foods has been recognized by RBC Capital for its exceptional performance in tackling significant challenges that once threatened the company’s existence. The analysts noted that while the decision to downgrade was difficult, they believe that the current share price adequately reflects the improvements made by Premier Foods.
The company’s evolution into a stable business model is a result of its sustained efforts over time. However, with the revised finance cost guidance factoring into future projections, RBC Capital has adjusted its outlook accordingly.
The updated price target of GBP2.20 represents RBC Capital’s current valuation of Premier Foods’ stock, taking into account the changes in the financial landscape and the company’s operational progress. This new target is set with the expectation that Premier Foods will continue to perform in line with the sector, following its period of significant transformation and growth.
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