AG Barr is called to pop higher

Shrewd marketing, steady sales and a loyal consumer base are all set to contribute to the company posting improved full-year figures.

City of London
Source: Bloomberg

On Tuesday 24 March AG Barr is due to post its full-year figures. The company’s adjusted earnings per share are set to increase from £0.27 up to £0.284 with sales also heading higher increasing to £260 million from last year’s £254.085 million. This is anticipated to help the company’s pre-tax profit beat last year’s £34.294 million and come in at £41.62 million.

Institutional analysts are not particularly bullish on the company with just two giving it a buy recommendation, four a hold and one a sell. It is also worth noting the average twelve-month price target that the institutions have for the business has already been superseded by the underlying share price. The shares have only recently fallen back from trading around the £6.80 region, bringing it closer to the institution's £6.33 target.

Broadly speaking 2014 was a good year for AG Barr as it sponsored the commonwealth games, held in Glasgow, and this enabled it to add to its strong branding. The company has also diversified into the cocktail drinks market with the £21 million acquisition of Funkin. This has seen the business add to its staple of Irn-Bru, Tizer and Rubicon with Funkin’s range of cocktail mixers, syrups and fruit purees.

Shares in AG Barr had been enjoying a resilient run until recently but this correction takes the company back down to the 50-day moving average and only just above the support that the 100- and 200-DMA should offer. Aided by the fact it is now close to being oversold, and that the full-year figures should show an improvement year–on-year, the company could be set for a bounce.

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.

Find articles by analysts