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The Expert View: JD Sports, Go-Ahead and Dairy Crest
by Chris Marshall on Sep 20, 2013 at 05:01
Dairy Crest shares have a whey to go
In a note using one of the worst puns ever wielded by an analyst, ‘The whey forward’, Charles Hall of Peel Hunt has increased his expectations for Dairy Crest (DCG.L) shares.
Investors in the producer of dairy products including Utterly Butterly, Cathedral City cheese and Frijj milkshakes can now expect shares to rise to 600p (up from 520p, with a buy rating).
Dairy Crest is making a £40 million investment in whey and cheese operations which will enable it to supply the infant formula market, Hall noted. The company’s whey (a by-product in the production of cheese) will be highly sought after, he added.
The analyst summed up: ‘The shares have performed well as confidence in the profit outlook has improved and the balance sheet has been de-risked. We do not believe that the opportunity in whey has been factored into expectations, and this will help profitability, cash generation and the rating.'
Dairy Crest shares dropped 0.2% yesterday, to close at 480p.
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