Liberum upgrades Cranswick after recent share price decline

Liberum upgraded Cranswick to ‘buy’ from ‘hold’ saying the recent de-rating presents a good buying opportunity.

It noted the shares have dropped more than 15% since April to pre-Crown Chicken acquisition levels. Comparing Cranswick’s share price to the FSTE 250, it has fallen by 8.5% in the last six months while the index was up 5.4%.

Last April, Cranswick made its second acquisition into poultry through the purchase of Crown Chicken for £40m.

Crown Chicken is the sixth largest poultry UK producer with a 3% market share and is a vertically integrated player from feed milling to breeding & rearing and processing.

“We estimate Crown can double its contribution to CWK’s profits in the mid-term on the back of capacity additions and potentially achieve a higher revenue/bird. We also have confidence that CWK’s recent expansions will translate into additional retail contracts and continued export growth.”

The brokerage maintained its price target on the stock at 2,500p.

At 1547 GMT, Cranswick shares were up 3.2% to 2,219p.