Kerry Group â€“ New strategic goals announced â€œHOLDâ€
Kerry Group announced their strategic targets for 2018-2022 this morning.
The Group aims to achieve 4-6% volume growth per annum in their Taste & Nutrition division coupled with 40 bps margin expansion per annum.
Consumer Foods is projected to grow volumes at 3-5% per annum while growing margins by 20 bps per annum.
Overall, the Group aims to achieve volume growth of 3-5% per annum and expand margins by 30 bps per annum.
Additionally, the Group aims to grow adjusted EPS by 10% per annum, achieve 12%+ ROACE, relatively outperform peers and have an 80% cash conversion ratio.
Kerry trades on 22.3x next yearâ€™s earnings, 16.1x EBITDA, with a 0.8% dividend yield. We continue to be impressed with managementâ€™s ability to produce stable returns for shareholders but we feel the stock is trading at fair value. We reiterate our recommendation â€œHOLDâ€.
Darren McKinley, CFA
Senior Equity Analyst