Premier Foods Shares: Analyst Disappointed with Recent Decline, Says Stock is Mispriced

Despite a strong rise on Thursday, Premier Foods’ (LON: PFD) shares remain under pressure, with Shore Capital describing the third-quarter trading update as “robust, pleasing and encouraging,” prompting the broker to argue the stock is mispriced.

The company lifted full-year trading profit guidance to the upper end of expectations, with Shore Capital maintaining its £197.4 million forecast for FY26 while anticipating “modest (2–3%) upgrades across the market”.

The firm reported 4.1% revenue growth for the 13 weeks to 27 December, including a 5.2% rise in proprietary branded sales and continued market share gains across grocery and sweet treats.

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Analysts Darren Shirley and Clive Black said they were “surprised and disappointed by the recent de-rating of Premier’s equity”, with the stock down over 5% in the last 6 months.

The analysts added that the shares should trade on a 15–16 times price-earnings multiple, implying a value of 225p–240p, compared with the current 172p. They highlighted a strengthening balance sheet, noting the group is forecast to be debt-free by FY27.

The note cited Premier’s product innovation, new category expansion and strong international performance, with sales in Australasia and the United States returning to double-digit growth. Acquired brands also posted double-digit increases, while new categories rose 29%.

Shore Capital, which acts in an advisory capacity to Premier Foods, said recent share weakness “is both an anomaly and an opportunity”, arguing the update provides “a spark for rating expansion”.