Cranswick PLC (LSE: CWK)

Cranswick PLC (LSE: CWK) is an FTSE 250-listed food processor Company. It supplies fresh and value-added food products to the UK grocery retailers and food services. This Report covers the Investment Highlights, Conclusion, and Recommendation on the stock.

Investment Rationale – Sell at GBX 3,310.00

• Profit Booking: CWK’s stock price has breached the R1 level suggested in the previous report published on 20 February 2023. Considering the market conditions and the price action, it is prudent to exit and book profit on the stock.
• Reduction in Return on Capital Employed: The Company’s Return on Capital Employed has declined from 16.9% in FY22 to 15.8% during FY23. Moreover, the adjusted Group operating margin also went down from 7.0% in FY22 to 6.3% during FY23.
• Technical Standpoint: The momentum oscillator, 14-day RSI (~67.78) is approaching an overbought scenario. Thus, the stock price can face retracement in the short-term.
• Macroeconomic Uncertainties: The market sentiments can remain weak in the short-term due to 40-year high inflation, subdued consumer disposable income, geopolitical tensions, and political risks.

Share Price Chart  

Conclusion

Based on the decline in adjusted Group operating margin during FY23, macroeconomic uncertainties, and price action stance, a "SELL" recommendation on Cranswick PLC (LSE: CWK) has been given at the closing market price of GBX 3,310.00 (as of 23 May 2023).

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 23 May 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.

Disclaimer

References to ‘Kalkine’, ‘we’, ‘our’ and ‘us’ refer to Kalkine Limited.

This website is a service of Kalkine Limited. Kalkine Limited is a private limited company, incorporated in England and Wales with registration number 07903332. Kalkine Limited is authorised and regulated by the Financial Conduct Authority under reference number 579414.

The article has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. No advice or information, whether oral or written, obtained by you from Kalkine or through or from the service shall create any warranty not expressly stated. Kalkine does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation.

Kalkine does not offer financial advice based upon your personal financial situation or goals, and we shall NOT be held liable for any investment or trading losses you may incur by using the opinions expressed in our publications, market updates, news alerts and corporate profiles. Kalkine does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation. Kalkine’s non-personalised advice does not in any way endorse or recommend individuals, investment products or services for your personal financial situation. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional authorised financial planner and adviser. You should be aware that the value of any investment and the income from it can go down as well as up and you may not get back the amount invested.

Kalkine Media Limited, an affiliate of Kalkine Limited, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.