Cautious stance on near-term growth forecasts

  • Sectors : Foods
  • Companies : Danone

Ratings and price correct at time of issue.

  • Danone

    Closing Price: 6344c

  • RATING 18/06/19

  • PREVIOUS RATING 09/02/17



Danone’s AGM update noted significant weakness in its Waters business, with Q2 sales expected to decline by c.30%. Regional commentary struck a cautious tone, with many regions experiencing slowing rates of growth. Our model already reflects a slower growth rebuild at Danone – with organic revenue growth of 0.2% forecast for FY20. We believe the equity has already priced in a more pedestrian growth outcome. To kick-start (from 2021 onwards) a runway for more sustainable earnings growth against an uncertain operating circumstance, we expect Danone to revisit productivity initiatives and accelerate portfolio management/development.

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Jun 29 2020, 08:35 IST/BST