Thorntons' recovery strategy appears to be on track with analysts predicting it will hit the top end of its profits forecast when it reports its full-year results next month.

In a note to investors, retail analysts at Investec this week described the chocolatier as "one of the undervalued players in the market". Although they predicted EBITDA was likely to fall 12.5% to £18.9m, this represented steady progress in the second half after profits had slumped by more than a third in the six months to 10 January.

Investec also increased Thorntons' target share price from 90p to 115p, citing the recent refinancing as a further reason for confidence. This month the chain renegotiated loans worth £52.5m until 2012 with lenders Lloyds, HSBC and Alliance & Leicester.

The note also expressed confidence in Thorntons' management team. "We now have greater visibility on the future management make-up, following the decision of the current financial director, John Wall, to step down from the board," the note read. "He is to be succeeded by Mark Robson who has wide experience of finance roles in retail and consumer goods."

Thorntons has rolled out a stream of new initiatives since Christmas in a bid to turn the business around. These include a tie-up with confectioner Tangerine, an extended soft drinks offer with Coca-Cola and a new pic'n'mix range. It is also considering a return to overseas markets.