All trading involves risk. Losses can exceed deposits.

Tate & Lyle stock drops after profit warning

Tate & Lyle has issued a profit warning ahead of its first-half figures expected on 6 November.

All trading involves risk. Losses can exceed deposits.
Tate & Lyle sugar
Source: Bloomberg

Tate & Lyle is trading at £6.12, after plunging 16% following a statement that it expects first-half profits to be in the range of £95-£105 million, and full-year profits in the region of £230-£245 million. This compares with analysts’ estimates of £288 million. The company cited falling fizzy drink sales in the US and oversupply of sucralose sweetener from China as the motives for the warning.

In May, Tate & Lyle announced a 2% drop in full-year operating profit, while revenue over the same period declined by 3%. The share price drifted as low as £6.22 in August following its downbeat full-year figures. The last six weeks have seen the share price stage a turnaround, but all those gains were wiped out this morning following the announcement.

Despite the second profit warning in seven months, equity analysts remain bullish. Out of the 16 recommendations, seven are buys, six are holds and three are sells.

The stock is receiving support from the 100-month moving average of £5.79, and if the stock can hold above this level it could target £6.74 in the short term.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material 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 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. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Find articles by analysts