Danone (AO) | Buy | CEO reiterates guidance, Lifeway Foods stake exit

研报英文原文证据摘录

Danone (AO) | Buy | CEO reiterates guidance, Lifeway Foods stake exit

Danone Buy | Target Price: EUR85.00

Company description Management

Danone’s portfolio is focused on health and nutrition, with strong positions in Gilles Schnepp, chairman

chilled dairy, water, and nutrition. It aims for 3-5% LFL growth with recurring Antoine de Saint-Affrique, CEO

operating profit growing faster, targets we believe are credible given the appeal Juergen Esser, CFO

of its categories. We see Danone as a winner given deep structural change in the

food sector amid increased use of anti-obesity drugs and concerns about ultra- Key shareholders

processed foods, which means packaged food calorie consumption has probably Free float 100.00%

peaked.

Investment case Valuation methodology

Danone has exposure to fast-growing and healthy categories in We use a mix of target multiples and a DCF to set our target

nutrition, water, on-trend dairy, and plant-based dairy, but price.

historically lacked consistent execution. It now has a team Our DCF assumes 4% medium-term growth, 2.25% terminal

building up an enviable track record in terms of consistent growth, and a 7.5% WACC.

execution and delivering on the promise of its categories. Risks to our rating

Dairy has been reinvigorated amid a Covid-led structural An end to the increased take up of GLP-1s where users typically

consumer shift toward healthier products while its protein eat more protein and products that are easy on the gut.

offering is gaining ground amid an ongoing trend towards A deterioration in its high-margin nutrition business.

higher protein diets, most recently by GLP-1 users. Formula rebound after recalls takes longer than anticipated.

We believe the group's annual LFL 3-5% growth goal is credible