Credit Suisse cuts Tate and Lyle's target price, reiterates 'neutral' rating

The Swiss bank said that reduced target price from 780p was due in part to its expectations that the past two years of strong growth in the group's bulk business, and particularly that of US Sweeteners, was likely to level off after achieving a low-single-digit price rise in 2018.

While this increase was seen as enough to cover the increased price of corn and keep the unit stable, it would not be enough to stop rising costs from eventually catching up with Tate & Lyle.

Analysts pointed out that Tate and Lyle's sucralose business, known for its Splenda brand, had a more stable looking future "for now", but as production plants were already operating at capacity this shot down any notions of growth as the division remained increasingly vulnerable to Chinese pricing.

This all left the food starches division, which accounted for 45% of group profits, as the giant's main source of growth, but the analysts noted even its volumes had begun to disappoint.

"With all this, it is hard to see much beyond a low single-digit organic EPS story going forward. We have 3-4% average EPS growth per annum 2017-2022," the research note read.

Allied to disappointment that the dividend has only been kept flat for two years and the analysts said: "all this seems to leave T&L at a bit of an impasse".

Accepting that the shares look a little cheaper than peers, they suggested the long-term earnings story "would seem to need more portfolio changes," from mergers and acquisitions.