Barry Callebaut Post the call: Better ST volumes but end-markets remain challenging, we expect limited change to consensus EPS

Research evidence excerpt

Barry Callebaut Post the call: Better ST volumes but end-markets remain challenging, we expect limited change to consensus EPS

Edward G Hockin AC Europe Equity Research

(44-20) 7742-6937 09 July 2026 J P M O R G A N

edward.hockin@jpmorgan.com

Investment Thesis, Valuation and Risks

Barry Callebaut (Underweight; Price Target: CHF1,000.00)

Investment Thesis

Barry Callebaut shares have rebounded from April 2025 lows, driven by a re-rating of

valuation amidst lower cocoa prices and consensus EPS inflection in FY27-28. We see risks

to a volumes rebound from persistent end market softness (lack of v-shape recoveries

historically, GLP-1 risk to food consumption). More significantly, we see that consensus

expectations for a strong EPS inflection over FY27-28 look optimistic on a full abatement

of FY25-26 disruption costs. With the shares re-rated to multiples that look expensive vs

Food, Ingredient and B2B chocolate peers, we expect earnings upgrades will be needed to

sustain the shares further.

Valuation

We value Barry Callebaut with a DCF, with mid-term growth of +3.0%, LT growth of +1.5%

and WACC of 9.0%. We set an August 2027 target price of CHF 1,000.

Barry Callebaut DCF Valuation

PV of FCF 3,752

PV of terminal value 4,014

Enterprise value 7,765

Net debt (FY27E) ex pension (2,201)

Pension (FY27E) (58)

Minorities (FY27E) (5)

Equity value 5,502

No. of shares (FY27E) 5,494,370

Implied share price 1,000

EPS 27E 58

Implied PE 27E 17.3x

Source: J.P. Morgan estimates.

Risks to Rating and Price Target

Key upside risks to our target price and rating are: 1) end markets in chocolate rebound

stronger than expected, including if consumer prices are cut or promotional intensity

increased; 2) outsourcing trends accelerate, driving Barry Callebaut outperformance; 3) raw