Kerry Group wins upgrade from UBS

Analysts single out food group’s taste and nutrition unit as being positioned for growth

Kerry Group: beginning to catch up with its peer group. Photograph: Dara Mac Dónaill

Kerry Group: beginning to catch up with its peer group. Photograph: Dara Mac Dónaill

 

Kerry Group’s sales exposure to high-growth areas should boost its performance, financial services company UBS has said after upgrading its view on the food stock.

UBS upgraded Kerry from a “neutral” rating to a “buy” rating, saying that it sees a 12 per cent upside to the Tralee group’s share price.

The analysts singled out Kerry’s taste and nutrition unit as being “well placed” to deliver volume growth. Additionally, it said Kerry’s room for expansion in emerging markets provides positive options for the group.

Peer group

UBS said while Kerry underperformed its peer group between 2013 and 2016, it expects its organic sales growth to be in line with the peer average over the next three years.

As for mergers and acquisitions, UBS suggests that Kerry is well-positioned to be a “key consolidator” in the industry, having spent €3 billion on mergers and acquisitions since 2005.

UBS analysts Yen Voo, Pinar Ergun and Nicole Mannion upgraded Kerry’s price target to €100 from €78. Currently trading above the €92 mark, the company’s share price is up by 36.3 per cent since the beginning of this year.