RBC cuts Premier Foods stock rating, sets GBP2.20 target

Published 27/05/2025, 07:24
RBC cuts Premier Foods stock rating, sets GBP2.20 target

On Tuesday, Premier Foods Plc. (LON:PFD:LN) (OTC:PFODF) experienced a change in its stock rating as RBC Capital Markets downgraded the company from Outperform to Sector Perform. Alongside this rating adjustment, the firm established a price target of GBP2.20 for the food manufacturer’s shares.

The downgrade by RBC Capital analysts was accompanied by a statement outlining updates to their estimates for Tigo, which included a slight reduction in projected capital expenditures in the upcoming years and an adjustment to account for the new Bolivian foreign exchange rate expected in 2025. The analysts made limited changes beyond these updates.

In their commentary, the analysts highlighted that despite the downgrade for Premier Foods, they have increased the December 2025 price target for Tigo to $50, up from the previous target of $41. This upward revision was primarily due to a change in the corporate tax rate assumption in their discounted cash flow (DCF) analysis, which was lowered from 35% to 22%.

Tigo, a player in the Latin American telecommunications sector, was identified by RBC Capital as their top pick within the industry. The analysts underscored Tigo’s attractive financial position, noting that it boasts the highest free cash flow yield among its Latin American peers, projected at 12% for the year 2025. This figure surpasses the 8-10% free cash flow yield of its most liquid competitors.

Additionally, RBC Capital pointed out that liquidity for Tigo in the United States has seen improvement following the delisting of the company’s Swedish Depository Receipts (SDRs). Over the last three months, Tigo has reported an Average Daily Trading Volume (ADTV) of $32 million.

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