(News Bulletin 247) – Royal Bank of Canada renewed its ‘outperformance’ opinion on Danone on Thursday, which the broker still has a target price of 70 euros.
In a research note, the Canadian broker points out that the French agri-food group is enjoying growth similar to that of the Swiss giant Nestlé, that is to say around 3%.
‘This finding has two implications’, says RBC in its study. ‘First, Nestlé is not showing as exceptional growth as investors may think and second, Danone’s recent change of course on its margins is likely to lead to an improvement in its financial performance’, continues- he.
If he believes that the efforts made by the management of Danone should eventually bear fruit, RBC stresses that the discount currently displayed by the title compared to Nestlé now appears unjustified.
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