FNP – Citi rates the stock as Buy

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Citi analysts have updated with the view that a deal between Freedom Foods Group and Lion is now unlikely, removing a potential overhang from its share price. The analysts remain of the view this company’s outlook is all about margin expansion medium-term.

Margin expansion should kick in this half (H2 FY19), and accelerate into FY20, on Citi’s projections. On this basis, the analysts find the share price looks heavily undervalued in comparison with global high-growth fast moving consumer goods (FMCG) peers. Buy. Target $6.55.

Sector: Food, Beverage & Tobacco.

Target price is $6.55.Current Price is $4.71. Difference: $1.84 – (brackets indicate current price is over target). If FNP meets the Citi target it will return approximately 28% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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