Analyst David Hayes from Jefferies maintained a Buy rating on DANONE SA and keeping the price target at €88.00.
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David Hayes has given his Buy rating due to a combination of factors that, in his view, mark the beginning of a more favorable “stage 3” phase for Danone. He expects continued solid growth in the China-focused nutrition business, supported by robust demand for infant formula, and anticipates that profit margins will start to improve after several years of heavy investment. In addition, he believes that the weaker segments of the portfolio, such as non‑protein yogurt offerings in North America, are likely to stabilize, reducing a key drag on overall performance.
He also highlights that Danone’s balance sheet provides scope to deploy additional capital in ways that could further enhance earnings, adding an extra lever for value creation. On his forecasts, the company can deliver next‑twelve‑months earnings growth of around 11%, which he views as attractive given the improving business momentum. This earnings outlook underpins his expectation that the stock’s valuation multiple can modestly re‑rate upward, supporting total return potential. Together, these elements underpin his decision to assign a Buy rating to Danone’s shares.