Shore Capital described C&C Group PLC (LSE:CCR) first-half update as “resilient”, with trading in line with expectations and operating profit set to rise year-on-year to €41.50–42.00 million.
The broker repeated a 'buy' recommendation for the Bulmers and Tennent's brewer.
While revenues fell 4% due to portfolio changes and weaker distribution volumes, Shore Capital said the key takeaway from the half was C&C's improved margin delivery, reflecting tight cost control in inflationary conditions.
The broker continues to forecast full-year operating profit of €79 million, with management meanwhile targeting €100 million over the medium term.
Shore Capital reckons a margin-led recovery would leave the stock looking undervalued.
At 162p, C&C trades on a forecast FY26 PER of 16x and an EV/EBITDA of around 8.5x.
“Headline metrics may appear fair at first glance, although in our view, fail to capture C&C’s market-leading positions across Scotland and Ireland, the margin recovery potential in distribution and increasing balance sheet optionality,” Shore Capital analyst Greg Johnson said in the note.
The group has also completed €84 million of a planned €150 million shareholder return programme, which the broker expects will further support the equity story.