Analysts at Numis raised their target price on Hilton Foods from 1,450.0p to 1,500.0p after the firm's acquisition of butcher Fairfax Meadow.
Hilton Food Group
29 October 2021 14:07:25
Source: Sharecast
Numis said Hilton's acquisition of Fairfax Meadows, a leading supplier of red meat into the UK's foodservice sector, fits well with the group's expanded capabilities in terms of meat trading and sous vide.
The broker also noted that the £23.8m cash purchase, funded from its existing debt facilities, provided Hilton with an opportunity to sell its other proteins, such as fish and plant-based, into the foodservice channel.
"As such, we believe that the acquisition provides a long-term growth opportunity for Hilton, said Numis.
"We have upgraded our adjusted earnings per share forecasts by circa 3% to reflect the acquisition in full-year 2022/2023 estimates. The valuation looks attractive on 17.3x PE and 8.4x enterprise value/earnings before interest, tax, depreciation and amortisation for calendar year 2022."
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