In a report released today, David Hayes from Jefferies maintained a Sell rating on DANONE SA, with a price target of €62.00.
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David Hayes has given his Sell rating due to a combination of factors impacting DANONE SA. Despite the company’s efforts to restructure and focus on new growth areas, such as protein and gut health, there are challenges that cannot be overlooked. The company’s valuation appears high, trading at 18.5 times the next twelve months’ price-to-earnings ratio, which might not be justified given the current market conditions.
Moreover, while there is positive momentum in certain segments like China Spec Nutrition and US Protein dairy products, these are counterbalanced by difficulties in the US Creamer and EU Dairy operations. The company’s strategic pivot and product innovations, such as the success of Aptamil in China, are promising, but they may not be enough to offset the broader operational challenges and high valuation concerns. These factors combined lead to a cautious outlook, resulting in the Sell rating.