(Boursier.com) — Danone is one of the good surprises of the day in Paris with a title that advances by 2.6% to 49.6 euros. It must be said that the agrifood giant reported strong growth in the third quarter and took the opportunity to raise its annual targets. The owner of the Evian and Badoit water brands and Activia yogurts now expects annual sales to rise by 7 to 8% like-for-like, against 5 to 6% previously. It confirmed its current operating margin forecast above 12%, after 13.7% in 2021.
The third trimester is just one trimester. But it shows several encouraging signs, and as such, it could be well received, especially since the level of PE 23 (13x) is not very far from the historical low point of 12.4x reached in April 2009, affirmed Oddo BHF before opening. The analyst is to ‘outperform’ on the value with a target of 64 euros. In the medium/long term, he continues to believe that the stock offers rerating potential via the repositioning of the group via a refocusing of the portfolio of brands and references, a refocusing of each division on its core business (release of milk for EDP , exit from small pots for Spec Nutrition and exit from small countries without critical size and without a strong brand for Waters), before a longer-term redefinition of the group’s strategic territory (Dairy Nutrition? or Nutritional Beverage?).
RBC (‘sector performance’) believes the results are “encouraging”, with Danone following the rest of the sector in offering price increases to offset inflationary cost pressures, but also posting “superior” organic growth in the all of its activities. This could be a sign that management’s new approach is bearing fruit… Morgan Stanley (‘online weighting’) says it’s ‘still too early to accept the story of a potential turnaround’, although the results are good enough to support action. The weak volumes of the EDP division, the uncertainty on prices and an “unfavorable” cost outlook are all factors to watch.
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