Peel Hunt has upgraded Cranswick, the premium pork and poultry producer, from 'add' to 'buy' and lifted its price target from 6,100p to 6,600p, arguing the shares have fallen back since the summer without good reason and now offer an attractive entry point.
Analyst forecasts point to around 6% volume growth and an 8% rise in profit before tax in the first half, driven by customer wins in fresh foods and market share gains.
The broker highlighted Cranswick's return on capital employed as evidence of the underlying strength of its business model, alongside healthy free cash flow generation.
A potential investment in a new poultry processing facility in Grimsby also caught the broker's attention, with Peel Hunt noting it could nearly double Cranswick's primary poultry processing capacity, representing a significant expansion of one of its fastest-growing product categories.
The shares are trading at approximately 15 times forecast earnings and 7.8 times enterprise value to EBITDA on March 2028 estimates, towards the bottom of their historical ranges of 15 to 20 times and 8 to 10 times respectively.
Peel Hunt said that valuation, combined with the operational momentum, makes the current level a compelling buying opportunity.
