Update shared on 29 Nov 2025
Fair value Decreased 2.15%Tate & Lyle's analyst price target has been reduced substantially, with new targets ranging from 430 GBp to 540 GBp. Analysts cite concerns around conservative fiscal guidance and potential contract headwinds as factors weighing on future growth estimates.
Analyst Commentary
Recent analyst coverage of Tate & Lyle reflects a mix of optimism around the company's long-term prospects and concerns about near-term pressures impacting valuation and growth forecasts.
Bullish Takeaways
- Bullish analysts maintain a positive rating and see fundamental value at current levels, even after reducing price targets.
- Despite lowered targets, some expect increased shareholder returns over the longer term based on the strength of Tate & Lyle's product offerings and potential recovery from deflationary pressures.
- Analysts with a constructive view believe the company's measures to guide through a softer market environment will support future earnings stability.
- There is confidence that strategic initiatives and operational execution can help the company weather short-term challenges and capture renewed growth as conditions normalize.
Bearish Takeaways
- Bearish analysts warn that fiscal 2026 guidance may not be conservative enough, which raises concerns about meeting ambitious targets.
- Valuation has come under pressure as a result of a weaker outlook for upcoming contract negotiations and macroeconomic uncertainty.
- Key risks include exposure to changes in customer purchasing patterns, such as those triggered by major food producers phasing out specific ingredients. These changes could impact the medium-term revenue base.
- Concerns are mounting about the company's ability to deliver sustained growth in a deflationary environment and the implications for earnings predictability.
What's in the News
- Tate & Lyle plc announced an interim dividend increase to 6.6 pence per share for the six months to 30 September 2025, up from 6.4 pence the previous year. The dividend is payable on 5 January 2026 to shareholders registered by 21 November 2025 (Key Developments).
- The company has maintained its earnings guidance for the full year ending 31 March 2026, expecting revenue to decline by a low-single digit percentage compared to the previous year (Key Developments).
- For the first half of the fiscal year, Tate & Lyle anticipates revenue will be 3% to 4% lower in constant currency terms compared to pro forma comparatives (Key Developments).
Valuation Changes
- Fair Value has decreased slightly, moving from £5.14 to £5.03 per share.
- Discount Rate remains unchanged at 7.07%.
- Revenue Growth expectation has edged up marginally, from 3.38% to 3.39%.
- Net Profit Margin has fallen modestly, dropping from 9.35% to 9.18%.
- Future P/E ratio has decreased marginally, from 16.66x to 16.59x.
Disclaimer
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