Company Name: SUPER GROUP LTD.
| Research House: DMG | Price Call: HOLD | Target Price: 2.12 |
DMG & Partners Securities downgraded its rating on instant beverage maker Super Group to neutral from buy and lowered its target price to $2.12 from $2.18, citing a recent spike in the prices of coffee beans, a major raw material for Super.
Shares of Super Group were down 0.45% at $2.20 on Wednesday. This year, Super shares have surged around 67%, outperforming the 12.6% gain in the FT ST Mid Cap index.
DMG cut its earnings estimate for Super’s 2012 fiscal year by 4% to $68 million. The broker said it saw some headwinds from higher robusta coffee bean prices that averaged $2,125 per tonne in May.
DMG said upside potential to Super’s stock will come from better margins due to an improved product mix as well as higher dividend payout ratios. Downside risks include a spike in input prices such as for robusta coffee beans, palm oil and sugar.
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