David Hayes, an analyst from Jefferies, maintained the Sell rating on DANONE SA (0KFX – Research Report). The associated price target remains the same with €61.00.
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David Hayes has given his Sell rating due to a combination of factors impacting DANONE SA’s growth prospects. The company’s projected sales growth for the fiscal year 2025 has been adjusted upwards to 3.4%, which is still below the consensus estimate of 4.0%. This revision is based on current trends in the Chinese Specialized Nutrition market and the demand for high-protein products in the U.S. However, the anticipated growth in the second half of the year is expected to be below 3%, compared to the consensus of 3.7%.
This slower growth is attributed to increasing competition in the creamers and protein segments, as well as challenging volume comparisons in the Chinese Nutrition sector. These factors could jeopardize the market’s perception of the company’s ability to achieve a mid-term organic sales growth rate of 3-4%, potentially affecting the current valuation of 18 times the next twelve months’ price-to-earnings ratio. As a result, the stock’s valuation may be at risk, prompting the Sell recommendation.