Mr Kipling owner Premier foods (LSE:PFD) is in a positive position to capture some of the US$5 billion cake market in the States, analysts at Deutsche Bank reckon.
In 2020, the food manufacturer reset its international strategy and decided to focus on driving growth through a select number of brands in specific markets.
One example included Mr Kipling being introduced into Australia, where it experienced 37% growth and has now secured an 18% market share in the category.
Now, Premier foods (LSE:PFD) is targeting the US and has begun working with a local distributor.
Deutsche Bank said the progress in this avenue has been welcomed by both “positive consumer and customer reactions” so far.
The German bank also said it was impressed last month when Premier foods (LSE:PFD) revealed it had finished paying off its pension deficit quicker than expected.
Analysts believe it “reflects the strong performance” of the strategy and expect it to provide “greater flexibility to pursue its capital allocation policy”.
Deutsche Bank rates Premier Foods a ‘buy’ and targets a 210p for the stock – representing a near 30% premium to its current market value.