Danone: with EPS in line, Oddo BHF still a buyer

(CercleFinance.com) - An analyst at Oddo BHF today said that he is maintaining his "buy" rating on the Danone share, after the agri-food giant's publication of 2018 results which included EPS that is "in line with expectations".


Oddo BHF also reinstates its target price of 81 euros, meaning upside potential of +23%. The publication of a diluted underlying EPS that is in line with expectations should not, theoretically, resultin the share price rising. In addition, the group's guidance (around 3% organic growth with an underlying operating margin of over 15%, ed.) is reassuring, although there is no reason to raise expectations in terms of operating profit. However, the stock's discount and underperformance over the past 12 months suggest that there was a lot of skepticism that should be partly removed by this publication, the broker points out.

Oddo BHF ends its report on Danone by details on the group's dividend, believing that the fact that it will be paid in cash (and no longer via a scrip dividend) is a signal that is very encouraging on the pace of the group's deleveraging on operational FCF generation.


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