Tate & Lyle PLC (LON:TATE) is no longer a hopeless case for analysts at Jefferies, which upgraded its forecasts for the food ingredients manufacturer.

Following a better set of half-year results than expected and taking confidence from indications of a probable better outcome to pricing negotiations for 2020 high fructose corn syrup contracts, the investment bank said it was giving up its former ‘underperform’ rating and raising its target price to 770p from 635p.

Jefferies upgraded its 2020 and 2021 earnings per share forecasts by 8% and 6%, more or less in line with the consensus view.

The new target price reflects this improved EPS forecast and an increased target multiple on the Solutions business.

However, the shares still are only getting a ‘hold’ recommendation as they remain “uncompelling” as EPS growth is still fairly flat if currency shifts are ignored.

While feeling Tate is “still struggling to deliver positive earnings momentum”, the analysts said they would take a more positive view if they saw further evidence of sustained volume and profit growth in the Food & Beverage Solutions business and further good news on sweetener economics.

However, there is potential for downside from FX risk to earnings GBP/USD in the event of a Conservative victory in the UK general election.

“The strong balance sheet affords some M&A salvation, but we prefer to look at that on its merits, when the time comes.”