Tate & Lyle plc : We could expect a rally
Entry price | Target | Stop-loss | Potential |
---|
GBX 820 |
GBX 0 |
GBX 803 |
-100% |
---|
Tate & Lyle shows relatively strong fundamentals and is coming back to attractive prices.
From a fundamental viewpoint, the security is cheap with a PER of 14.3x for 2014 and 13.1x for 2015. It is also cheaper than the industry average. Besides, EV/sales is low with a ratio at 1.20 for this year. Profitability of the group is also satisfying with an operating margin of 11% for 2014 and a net margin of 7.63%. Eventually, analysts revised upward their EPS estimates lastly.
Graphically, prices are evolving horizontally for few months as indicated by the neutral trend in the mid and long term. The stock is now testing the lower limit of the bullish trend line, which should play the role of an obstacle. Even if the 20-day moving average is declining, the 50-week will help the security to bounce.
Thus, investors will buy Tate & Lyle at the current price to hope for a return in the direction of GBp 847, then GBp 883. A stop loss should be fixed under the short term support.
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