Danone: Proactive Risk Management and Strong Governance Underpin Buy Rating Despite Infant Formula Recall Noise

Analyst David Hayes of Jefferies maintained a Buy rating on DANONE SA, with a price target of €86.00.

David Hayes has given his Buy rating due to a combination of factors tied to both operational discipline and risk management. He views Danone’s handling of the recent infant formula issue as evidence of strong governance, noting that the company acted quickly to remove specific batches from select markets even though toxin levels were believed to be below thresholds considered unsafe. In his assessment, this reflects a cautious stance aligned with strict regulatory expectations, rather than a sign of systemic quality failures or elevated health risks.

Hayes also interprets the episode as an industry-wide supply chain problem stemming from a contaminated ingredient, not a Danone-specific weakness, which limits the long‑term financial impact relative to peers. By taking a proactive approach and cooperating fully with authorities, Danone helps protect its brand equity in a sensitive category and reduces the likelihood of more disruptive regulatory action later. On balance, he concludes that the fundamentals and reputation of the business remain intact, supporting a positive view on the shares despite short‑term noise around the recalls.

In another report released today, Barclays also maintained a Buy rating on the stock with a €83.00 price target.