Berenberg shrugs off Hilton Food's seafood woes, stays at 'buy'

(Sharecast News) - Berenberg has maintained a positive view on Hilton Food Group despite a steep sell-off of the stock last week due to seafood-related supply issues, highlighting the strong momentum in other parts of the business.

The broker kept a 'buy' recommendation, and trimmed its target price for the shares from 1,120p to 1,100p - which still represents significant upside to the current share price of around 667p.

Interim results from the proteins-focused food packaging company on 3 September caused a sell-off in the shares after it cited supply chain problems related to smoked salmon shipments to the US and inflationary trends in white fish market.

Shares dropped 17% on the day and remain down 19% since the day before the results.

"The issues with the seafood business affecting the H1 2025 results are not the same as the issues that resulted in a profit warning in August 2022. Despite the differences, the market has treated them as being the same, in our view," Berenberg said.

Nevertheless, the company still delivered first-half results ahead of consensus forecasts, supported by a strong performance from the retail meat business, which delivered volume growth across the board and outperformed the wider sector.

"We think the strong trading momentum in the retail meat business (which accounts for 80% of group sales), reflected in the delivery of sales volume growth ahead of the market, is being overlooked at current valuation levels," Berenberg said.