(News Bulletin 247) – Royal Bank of Canada downgraded its opinion on Heineken on Wednesday, reducing it from ‘performance in line with the sector’ to ‘underperformance’ with a price target reduced from 86 to 78 euros.
In a research note, the financial intermediary believes that the Dutch brewer has for too long overvalued the price control (‘pricing power’) available to its ‘premium’ brands, which has led it to neglect its investments in its high-end products.
The essential need to revitalize its portfolio now leads the Canadian analyst to anticipate a contraction in the group’s profit margins, with an operating margin by 2025 expected to be 2.1 points lower than that of 2022.
Its earnings forecasts for 2025 are therefore 26% below the current market consensus.
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