Aryzta shares hit record lows

Shares in Swiss-Irish bakery group Aryzta fell to their record low on Friday after an analyst from financial services company Vontobel cut his price target on the stock.

The Cuisine de France and Otis Spunkmeyer owner saw shares on its Swiss listing fall to 22.35 Swiss francs, down 4.36 per cent on the day and among the biggest losers on the pan-European Stoxx 600 index.

Aryzta, which also supplies buns to clients including McDonald’s, had its worst day since it began trading almost 10 years ago as analyst Jean-Philippe Bertschy lowered his price target to 20 Swiss francs from 24, projecting a “long and bumpy” turnaround ahead for the group.

Shares in the embattled company have seen recent weakness as pressure mounted on the group to dispose of non-core assets.

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Aryzta went on to sell its US Cloverhill business, but for significantly less than it paid. The US bakery business was bought less than four years ago for $390 million (€319 million) and sold recently for just €20 million, according to US regulatory filings.

Speaking to The Irish Times last week, Investec equity analyst Ian Hunter said it was good for the company to get Cloverhill off its books. "It signalled it was going to sell it. We all knew it was one of their troubled plants, as well as being non-core. It clears one obstacle out of the way.

“It probably doesn’t move the balance sheet problem significantly, but we still have possibly the sale of its 49 per cent stake in Picard before the year end,” he added.

In his note to clients, Mr Bertschy wrote that relief provided by the sale of Aryzta’s non-core assets won’t eclipse the company’s “massive structural headwinds”.