Glanbia shares slip after ratings move
SHARES in Glanbia slipped back yesterday after Goodbody Stockbrokers cut its rating on the stock to "add" from "buy" but increased its annual forecasts for the company.
The broker increased its share-price target to €6.50 but cut the stock to "add" after a 44pc increase in the company's share price since November.
Liam Igoe, an analyst with the firm, increased his 2012 earnings per share forecast by 4pc to 50.4c and by 7pc in 2013 to 56.4c.
"Looking ahead, the strongest growth is being generated from its sports-nutrition business, where we are forecasting 18pc sales growth in full year 2012, of which half is volume related.
"Based on our sum-of-the-parts valuation model, we reckon Glanbia is currently fairly valued. However, its medium- term outlook remains very favourable and there are a number of potential catalysts that may further underpin its increased valuation multiple, which is at a significant premium to the international ingredients sector," he said.
Separately, Glanbia's nutritionals peer GNC increased its guidance for the first quarter of the year as the rate of sales outstripped the expected pace of 8-9pc.
Davy Stockbrokers' Aiden O'Donnell said this was excellent news for Glanbia.
"This is very bullish news-flow for Glanbia, a key supplier into the speciality retailer channel through its Optimum and BSN brands.
"It flagged at the full-year results stage that momentum remained strong in the segment and this announcement from GNC very much confirms these comments," he said.
Glanbia closed down 1.35pc at €5.85.