Berenberg raises target price on Cranswick

Berenberg highlighted that Cranswick’s first-quarter update confirmed that it had made "an excellent start to the year", recording 19% organic revenue growth.

Although the German bank said it expects the rate of expansion to temper from here on in, it still estimates "substantial growth" will be delivered in the 2020/21 full-year.

Berenberg also noted that while it believes investment will be needed for expansion to continue in future years, it feels the company has the balance sheet strength to accommodate this.

"The company has considerable balance sheet capacity, with bank net debt/EBITDA below 1.0x and more than £100.0m of unutilised debt facilities, providing plenty of headroom to make such investments," said the analysts, who reiterated their 'buy' rating on the stock.

"We envisage Cranswick developing a second poultry facility in the next few years and continuing to undertake targeted bolt-on M&A deals."