Cranswick Shares Climb After Berenberg Upgrade Cites Expansion Plans

Shares in UK meat producer Cranswick (LSE:CWK) rose to their highest level in over a week on Tuesday after analysts at Berenberg upgraded the company's stock to "buy" from "hold." The bank cited Cranswick's ongoing investment in its poultry operations and a strong demand environment as key drivers for its more optimistic outlook.

Cranswick's stock climbed 1.4% to 5,170 pence in Tuesday's trading, outperforming the broader FTSE 250 index, which was up 1.18%, according to the latest available session data.

Rationale for the Upgrade

Berenberg raised its price target on Cranswick to 6,080 pence from 5,770 pence. The decision followed a recent investor visit to the company's poultry facility in Suffolk, which the broker said highlighted Cranswick's growing market position and the potential returns from further capital investment.

The note detailed Cranswick's expansion plans for its Eye facility in Suffolk:

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• The site currently processes approximately 1.6 million birds per week, operating at around 95% capacity.
• A planned £56 million investment aims to increase this capacity to 2 million birds per week.
• Completion of the expansion is expected by April 2027, with a subsequent 12- to 18-month ramp-up period.

Market Outlook and Valuation

Analysts at Berenberg pointed to a supportive market backdrop, forecasting annual demand growth of 3%-4% for UK poultry and 1%-2% for pork. They noted that constrained market supply could further benefit Cranswick's volume growth as its new capacity comes online.

Berenberg also highlighted a potential second poultry-processing facility near Grimsby, for which Cranswick has submitted a planning application. The project, estimated at a potential £200 million, is not yet included in the bank's forecasts due to its uncertain timing. The broker added that Cranswick's valuation has become more attractive, trading at 15.7 times expected fiscal year 2027 earnings, down from 19 times two years ago.