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(Sharecast News) - Berenberg cut its price target on SSP to 225p from 245p on Monday, but reiterated its 'buy' rating on the stock, saying the group delivered resilient fourth‑quarter earnings despite softer free cash flow and a weaker performance in North America.
Berenberg said SSP posted a solid top‑line showing in Q4 to September, led again by the UK, with like‑for‑like growth of 4% matching consensus. Continued optimisation of its North American joint‑venture model and a lower tax charge helped SSP deliver FY26 earnings per share in line with expectations, extending what Berenberg described as an 18% EPS compound annual growth rate since FY24.
However, Berenberg also noted that negative US passenger trends over the key summer period meant the region underperformed internal forecasts, driving a 4% miss versus FY26 EBIT consensus.
Berenberg noted that Asia‑Pacific and Eastern Europe & Middle East improved, led by the Gulf region, although knock‑on effects from the Middle East conflict continued to weigh on Asia‑Pacific and India. Continental Europe also delivered solid trading.
The German cut its FY26 underlying earnings estimate by 5%, with the downgrade flowing through FY27 and FY28. It said free cash flow of around £70m for FY26 fell short of the prior £100m+ guidance, despite underlying cash generation improving to £140m to £150m. SSP attributed the shortfall to decisions not to draw incremental supply‑chain financing, faster European restructuring and North American weakness.
Berenberg's sum‑of‑the‑parts valuation supports the new 225p target, with SSP's core business trading on an 8x FY27 price-to-earnings ratio, a roughly 25% discount to peers that the broker views as unwarranted given high‑teens EPS growth and sector‑leading cash returns.
Peel Hunt upgraded Cranswick to 'buy' from 'add' on Monday and hiked its price target on the stock to 6,600p from 6,100p, saying it expects first-half volumes to increase by around 6% and pre-tax profits by approximately 8%, helped by customer growth in fresh foods and share gains.
The broker highlighted "impressive" returns and said Cranswick's return on capital employed demonstrates the strength of its business model. It also said the potential investment in Grimsby could nearly double poultry primary processing.
"Cranswick is performing well, delivering strong returns and healthy free cash flow," Peel Hunt said. "In our view, the shares have subsided since the summer for no good reason, and the current level provides an attractive entry point."
Peel Hunt noted the shares were trading on a roughly 15x price-to-earnings ratio and at 7.8x enterprise value/underlying earnings to March 2028, which was at the low end of their historical trading range.
