In last week’s trading update, Hilton Food Group (HFG) reported that YTD trading has been in line with expectations. Volume and revenue both grew at the group level, but we infer that this growth was modest. Revenue growth was led by the UK & Ireland and Europe, although the latter was held back by a decline in vegetarian/vegan food due to the challenges currently facing that category. In APAC, volume grew, but revenue declined due to lower raw material prices (which are mechanically passed through to customers). Fortunately, HFG’s profits in this market are volume-led. Given the headwinds from lower raw material prices and the strength of Sterling we reduce our FY24E revenue forecast by 4%, from £4,162m to £4,010m. Our FY24E operating profit forecast is unchanged at £103.0m, and our FY24E PBT forecast falls by £1m (1%) as we factor in a higher interest charge with rates remaining relatively high. Our EPS forecast falls by 3.5% as we factor in the tax rate guidance given at the FY24 results. Although the Cranswick (CWK) and HFG share prices have performed similarly this year, up 16% and 17% respectively, the significant earnings upgrades at CWK mean that their valuations have converged (see Figure 1 overleaf). HFG now trades at a 16% discount to CWK on CY25E PE (with HFG on 14.7x and CWK on 17.5x). Although we think that HFG is well past the challenges of 2022, with the profitability of its UK Seafood business continuing to recover, the experience of the last few years has shown CWK to be the more robust and consistent performer. We do not expect HFG’s discount to CWK to narrow further, at least not for now, and consequently downgrade our HFG recommendation to HOLD. Our new TP of 955p is based on 14.8x CY25E PE, a 15% discount to CWK.