Downgrade to Underperform, China & US Momentum Worries

Research evidence excerpt

Downgrade to Underperform, China & US Momentum Worries

France | Food & HPC

Danone EquityJulyResearch22, 2026

RATING | TARGET | ESTIMATE CHANGEDowngrade to Underperform, China & US

RATING UNDERPERFORM (BUY)Momentum Worries

PRICE €73.14^

The next 6-12m, we think, are determined by the balance of China Nutrition

slowdown vs. NORAM Dairy acceleration; they are 30% of sales but >50% PRICE TARGET | % TO PT €62.00 (€80.00) | -15%

of 1Q26 LFL. China risks are mounting; Aptamil's formula edge is less 52W HIGH-LOW €80.14 - €60.64

differentiating, & Medical Nutrition faces rising (price) competition. US Dairy FLOAT (%) | ADV MM (USD) 97.7% | 129.20

now looks more constrained by competition than service level issues. Cut MARKET CAP €47.2B | $53.8B

FY27E EPS 7%, move to Underperform (PT €62), implying a derate to <14.5x TICKER BN FP ^Prior trading day's closing price unless otherwise

NTM P/E vs ~18x today. noted.

US EDP, less supply constraint, more competitive challenge? When we upgraded Danone in FY (Dec) CHANGE TO JEFe JEF vs CONS

Sept 2025, a key assumption was that resolving capacity constraints would drive a step-up in 2026 2027 2026 2027

US EDP growth. Despite steady additions of capacity, Nielsen data shows no corresponding REV NM -1% NM NM

recovery. The last year, the yogurt category grew ~11% while Danone contracted 2%; Chobani

EPS -3% -7% -1% -4%

gained 270bps of share while Danone lost ~350bps. We worry Chobani has built a focused

single-brand protein platform and translated capacity investment into share. Danone spreads

across multiple brands and has yet to demonstrate recovery. We cut FY26/27E NORAM EDP

Exhibit 1 - US Greek yogurt: Danone v Chobaniorganic growth to an average 3.2% (prior 4.2%). v Category Growth

35%China Specialised Nutrition: Slowing on Two Fronts.