Deutsche Bank has slashed its price target for Treatt PLC (LSE:TET) from 425p to 245p, warning that expectations for a second-half recovery appear overly optimistic.
Its revised profit forecast of £13.7 million for the year sits 14% below the lower end of Treatt’s new guidance range, following a disappointing first-half trading update.
Analyst Deirdre Mullaney said the market remains cautious and Treatt’s weak performance, down 56% so far this year versus a 4% drop in the FTSE All-Share. reflects ongoing concern about its ability to rebound amid persistent cost pressures.
Although traditionally a second-half-weighted business, Mullaney said the scale of the recovery now required in sales and profit “is a stretch in current market conditions”.
The company, which supplies natural ingredients to the beverage and fragrance industries, has been squeezed by high citrus prices, soft demand in North America, and geopolitical uncertainty.
Shares fell 34% on the day of the announcement and were last quoted at 214p.