Premier Foods share value ‘hit by newspaper story’
The share value of debt-laden food manufacturer Premier Foods was driven down by a Financial Times newspaper article in April, according to City analyst Investec.
Martin Deboo, analyst with Investec, said: “Premier’s shares continue their drift south, fuelled most recently, in our view, by a Financial Times (FT) story on the need for fresh equity. But we have been discounting such an eventuality for months now.
“The shares are off 15% since March 28, when the FT ran a story suggesting Premier was contemplating raising fresh equity.”
Despite Investec resuming a recommendation of ‘buy’ on Premier’s stock and retaining its 95p price target, Deboo noted that, at three times earnings, Premier’s cost of equity was “north of 20%”.
