Shares of Premier Foods PLC (LON: PFD) plunged more than 6% on Tuesday despite upgraded full-year profit guidance from the owner of Mr Kipling and Bird’s Custard.
Premier Foods announced that its revenue rose 15% to £421 million with profit before tax skyrocketing 70% to £50 million. As a result, net debt was slashed by 18% to £403 million.
The company benefited immensely from lockdowns as people confined at home spent more time on home-cooking and groceries. Given yesterday’s news about the Covid-19 vaccine, investors are slightly worried that the normalization will lead to people returning to eat outside.
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Analysts at Peel Hunt increased the price target on Premier Foods to 125p from prior 120p.
“The renewed lockdown is likely to extend the positive performance in the short-term, but we see potential for some of the themes to be longer lasting, with more people working from home, increase in cooking from scratch, greater online penetration and a stronger base for growing International.”
Premier Foods share price dipped below the 100p mark today to extends yesterday’s losses.
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