Berenberg lowers target price on Nichols

(Sharecast News) - Analysts at Berenberg lowered their target price on fruit flavoured cordial producer Nichols from 1,820p to 1,720p on Wednesday after the group reported full-year results that were in line with consensus estimates. Nichols reported adjusted underlying earnings of £31.7m and adjusted pre-tax profits of £33.6m, up 10% and 7% year-on-year, respectively, and earnings per share growth of 5.5% to 67.5p. Nichols also increased its final dividend by 9% to 18.7p, resulting in a FY25 dividend per share of 33.7p.

Furthermore, Berenberg noted that Nichols announced a change to its dividend policy, as it plans to reduce its dividend cover to 1.5x from 2.0x to reflect the board's confidence in its outlook, the high levels of cash generation and its robust balance sheet.

"Nichols is a high quality, defensive growth option in an uncertain market environment, with the stock generating 20% margins, ROCE of over 30%, high levels of free cash flow and a robust balance sheet, offering a 5.3% dividend yield at just 12.8x P/E," said Berenberg.

The German bank reiterated its 'buy' rating on the stock.





Reporting by Iain Gilbert at Sharecast.com