Tate & Lyle PLC (LSE:TATE) shares were the biggest faller on London's FTSE 350 on Monday, down 6.2% to 468.8p after being hit by a downgrade from Morgan Stanley over risks to its sucralose sweetener business.
The US bank cut its rating on the ingredients group to ‘underweight’ from ‘equalweight’ and lowered its share price target to 500p from 590p.
Morgan Stanley analysts said they see a higher risk to mid-term targets after Tyson Foods said it would phase out sucralose from US branded products.
There is a risk that more consumer goods companies could follow, the analysts added.
Sucralose, a high-intensity sweetener and a sugar reduction ingredient, sometimes sold under the Splenda and Zucro brand names, is used by many food and beverage companies in various food categories and beverages.
For the year to March 2025, Sucralose saw robust demand with revenue of $193 million, up 16%, and adjusted EBITDA up 18% to £60 million.