Greencore Was a Buy for Every Single Analyst. Then It Fell 30%
(Bloomberg) -- Stock darling Greencore Group Plc is likely to attract some bears after Tuesday’s surprise profit warning.
The shares tumbled as much as 30 percent in London, the most on record, after the Irish food company forecast earnings for this year below analysts’ expectations as Chief Executive Officer Patrick Coveney seeks to tackle persistent problems in its U.S. business. Greencore will also be halting fresh production at its Rhode Island facility from March 25.
Before today, all 12 analysts tracked by Bloomberg rated Greencore a buy or equivalent, with none recommending a hold or sell. That made it the best-rated among the 11 members of the FTSE All-Share Food Producers Index, according to Bloomberg consensus analyst ratings.
“Having promised significant new business wins, the company has now recognized that these will be slower than hoped and that it needs to address under-utilized plants in the U.S.,” Peel Hunt analyst Charles Hall wrote in a note, downgrading the stock to hold. “Management credibility is clearly damaged.”
Davy cut its recommendation to neutral from outperform, citing “negative earnings momentum and associated uncertainty in North America” in a note. Investec is placing its price target of 263 pence under review.
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