Market's view on Hilton Foods
Published on April 2024
- A stock watcher notes a nearly filled chart gap from two years ago and suggests that the company is in better shape now, citing a major contract win with Walmart and higher rates than before, predicting a potential share price increase to £12 in 2024.
- A recent dip in share prices was seen as a buying opportunity by another watcher, indicating a positive outlook for upward movement.
- There was significant debt reduction and modest volume increase reported, unexpected especially with expansion in Canada for Walmart, highlighting effective management.
- The company’s dividend has been increased, signalling steady progress.
- Queries about a potential re-rating in the region of £12 with current interest rate levels were raised.
- A trading update was anticipated by one of the watchers.
- The company’s performance was noted to benefit from a favourable announcement.
- It was mentioned that the company did not benefit from a recent uplift in the FTSE.
- Low pricing power was identified as an issue for the company.
- Financial results for a 52-week period showed a revenue increase of 16.5% to £3.8bn, although headline operating profit was down by 14.8%; the adjusted operating profit saw a decrease of 3.3% with margins affected in an inflationary environment.
- A comparison of margin data with another similar business highlighted that while gross profit margins and operating margins were lower for the company, capital expenditure was higher, raising questions about the impact of this spending on growth.
- Optimism about the share price returning to £12 within a year was expressed by a watcher who averaged down their investment to £8.50.