Bank of America (BofA) has downgraded Sapphire Foods from a Neutral to an Underperform rating, reducing the target price to Rs 330 from Rs 336. The downgrade reflects BofA’s concerns over unfavorable risk-reward dynamics in the current market environment.
The report highlights that despite a recent rally in the stock price, the mid-term business upsides have not materialized as expected. BofA also suggests that street earnings estimates for Sapphire Foods may still need to be revised lower to reflect the current situation.
While Pizza Hut continues to maintain a dominant position in Sri Lanka, BofA notes that a meaningful business uptick in this segment is yet to be seen, further contributing to the cautious outlook for Sapphire Foods.
At a current market price of Rs 345, investors may need to reassess their positions in light of these factors.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as investment advice. Readers are advised to seek independent financial advice before making any investment decisions. The author and the publication are not responsible for any investment losses based on the information provided.
