Analyst David Hayes of Jefferies maintained a Sell rating on DANONE SA, retaining the price target of €61.00.
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David Hayes has given his Sell rating due to a combination of factors impacting DANONE SA’s outlook. One of the primary concerns is the recent profit warning issued by Feihe, which has led to a significant drop in Feihe’s share prices. This situation raises concerns about potential challenges in the Chinese market, where Danone derives a substantial portion of its profits. The uncertainty surrounding the level of subsidies for new parents and the ongoing channel inventory reset adds to the complexity of the market conditions.
Additionally, while there is an optimistic projection for sales growth in the second half of the year, the overall decline in sales and net profit for the first half raises red flags. The downgrade in Feihe’s sales growth expectations for the full year further contributes to a cautious outlook. These factors combined suggest potential headwinds for Danone, prompting David Hayes to recommend a Sell rating for the stock.
According to TipRanks, Hayes is a 3-star analyst with an average return of 2.6% and a 59.39% success rate. Hayes covers the Consumer Defensive sector, focusing on stocks such as Nestlé SA, DANONE SA, and L’Oreal.