Financial Trading Blog
Stock of the day 31/03/2016 – Tate & Lyle PLC
Starting 2016 just shy of £6 (a solid recovery from 2015’s Black Monday-inspired, 5-ish year sub-£5 lows) things started off rather promisingly for Tate & Lyle, which managed to rise to a 9 month high of £6.27 as January came to a close. Yet that nascent rise was soon nipped in the bud as February got underway.
For the last two years February has been a bit of a horrorshow for Tate & Lyle; back in 2014 it plunged 16% after its early in the year update, whilst in 2015 it dropped just shy of 14% following its similarly timed statement. Things weren’t as bad this time around, though the company still couldn’t avoid a nasty 7% slide (on top of the 8% drop it saw in the first week of the month) as it revealed that the current slumps seen by the Mexican peso and Brazilian real, and the continued issues in the US ethanol industry, would lead its full year adjusted profit to be ‘modestly below’ previous expectations.
(Source: IT-Finance.com 31/03/2016)
Obviously investors weren’t impressed by Tate & Lyle once again announcing something akin to a profit warning, a too regular occurrence for the agribusiness firm, its post-update performance causing the stock to hit at a 5 month intraday low of £5.29. Yet CEO Javed Ahmed and CFO Nick Hampton soon swung in to save the day, buying up 50000 shares between them to help put the stock back on the road to rebound, if not recovery. The broader market gains didn’t hurt either, and by the start of February the stock was once again teasing the £5.90s.
The announcement of George Osborne’s sugar tax during his annual budget seemed to cause some concern in mid-March, helping to push Tate & Lyle back towards the £5.50 mark even though some have argued that, as the exclusive producers of Splenda in the UK, the company may benefit from a shift away from sugar by Big Soft Drink. Since then a general market recovery, and a ‘Buy’ rating from Liberum Capital, has lifted the stock back to a current trading price of £5.76 (IT-Finance.com, 31/03/2016).
Tate & Lyle PLC has a consensus rating of ‘Hold’ with an average target price of £6.44.
It's easy to open an account
- Fill in our simple online application form
- Fund your account
- Start trading the global markets instantly!
SEARCH FOR AN ARTICLE:
Enter a keyword and search for all relevant articlesMARKET ANALYSIS
RECENT POSTS
DISCLAIMER
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investors lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money. For professional clients, spread betting and CFD trading can also result in losses larger than your initial stake or deposit.
Spreadex Ltd is authorised and regulated by the Financial Conduct Authority, provides an execution only service and does not provide advice in any way. Nothing within this update should be deemed to constitute the provision of investment advice, recommendations, any other professional advice in any way, or a record of our trading prices. This update does not constitute or form part of an offer of, or solicitation for a transaction in any financial instrument, nor shall it or the fact of its distribution form the basis of, or be relied on in connection with, any contract therefore. Any persons placing trades based on their interpretation of the comments or information within this update does so entirely at their own risk.
No representation, warranty, or undertaking, express or limited, is given as to the accuracy or completeness of the information or opinions contained within this update by Spreadex Ltd or any of its employees and no liability is accepted by such persons for the accuracy or completeness of any such information or opinions. As such, no reliance may be placed for any purpose on the information and opinions contained within this update.
The information contained within this update is the intellectual property of Spreadex Ltd and is protected by UK and International copyright laws. All rights reserved. Users may however freely download, distribute and reproduce extracts of the contents, subject always to accrediting Spreadex Ltd as the source and providing a hyperlink to www.spreadex.com.
