Danone: Oddo downgrades rating.

(CercleFinance.com) - Following a seminar organised by Danone, Oddo has downgraded its rating on the stock to Reduce, and has adjusted its target price to 60 euros.


Oddo believes that shareholders will pay for the new balance proposed by Danone. Analysts say that in the near term, results will be weak and there are some inconsistencies in the strategies proposed by the group.

"Danone is implementing a savings plan (Protein, 1 billion plan), 70% of which will be devoted to growth, which confirms the impossibility of passing on additional costs to end customers. Shareholders must therefore implicitly accept bearing the cost of this transformation, as illustrated in the decline in ROIC over the coming years; -150bp announced by management against 10.6% in 2016" Oddo explains.

The broker says that it is very cautious about the Group's margin growth in 2017.



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