The GBp 70.7 support should allow Premier Foods to rally again.

From a fundamental viewpoint, Premier Foods is undervalued in terms of enterprise value. Based on the current price, its market capitalization, plus its net debt, represents 0.97 times its revenues. This valuation is only 8.8 and 8.45 times the next two years earnings. Furthermore, EPS estimates have been revised upward in the last few months by analysts.

From a technical viewpoint, the stock is coming back close to a strong support at GBp 70.7. Moving averages are flat and technical indicators illustrate the oversold situation. The GBp 70.7 area could cause a positive reaction for the coming trading sessions and allow a technical rebound towards the GBp 80 and then the mid-term target price at GBp 88.3.

Thanks to the technical pattern and strong fundamentals, active investors can take a long position above GBp 70.7. The downside potential is limited and the timing seems perfect to benefit from a technical rebound.
The goals will be fixed at GBp 80 in a first time and then at GBp 88.3.
However, a bearish trend would regain the upper hand if the security crosses GBp 70.7.