Shares in Tate & Lyle rise 1.7 percent, among the top gainers onthe FTSE 100 , boosted by Societe Generale's upgrade according totraders, as the broker raises the British sweeteners and starches maker to "buy"from "hold" and ramps up its target price to 805 pence from 650 pence.
"Tate's transformation from a commodity company to a leading specialty foodingredients player is still a work in progress but after significantunderperformance year-to-date we think the current valuation fails to reflectthe improvement in earnings quality and growth prospects to date," SocieteGenerale says in a note.
The market implied five-year compound annual growth rate for Tate & Lyle isminus 0.8 percent, well below sector peers and suggests the market's valuationof the firm might be pricing in too much disappointment, according to ThomsonReuters Starmine data.
Tate Lyle's share shares also trade at a discount to its sector on 11.6times forward 12-month price-to-earnings compared with peers on between 14 and16 times.
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