The share of the baked goods manufacturer ARYZTA was unable to overcome the CHF 1.30 mark in recent weeks. However, pessimism is out of place just because the share is only now digesting the highs of the past few months. The new management team under Chairman Urs Jordi has impressively demonstrated that the company has taken a marked turn for the better. Promises kept! The progress made in terms of business management, combined with good key financial figures, can be seen, including in the gratifying share performance. However, the success story is not over and further positive chapters are likely to follow.
The sale of the American activities will bring USD 850 million into the company's coffers, while the Brazilian business will bring in an estimated EUR 100 million. It is expected that the proceeds from the sale will be used to alleviate the expensive problem of hybrid bonds. A partial redemption and/or to settle the deferred, high-interest interest payments would be conceivable. On October 4, ARYZTA will report on the course of business, the outlook and also the handling of the hybrid bonds. That something has to be done is obvious and should be positively received by the market. The pandemic, which is likely to be prolonged, is still causing headwinds. Dissatisfied analysts think they see a stumbling block in this; fewer baked goods are being ordered or they could be produced by those affected themselves. However, we assume that Urs Jordi will be able to position ARYZTA more efficiently and thus more favourably compared to the competition. In addition, he is likely to surprise the market with new, innovative and attractive products, as he has indicated in the past. In anticipation of continued success, we are raising our price target to CHF 1.80! The risk rating is also upgraded to R3!
