Danone: Oddo still a buyer after the sale of Vega

(CercleFinance.com) - Oddo confirms its Outperform rating on the Danone stock with a target price of 70 euros after the group's announcement of the sale of Vega yesterday.


Faced with operational challenges, analysts believe that top management and especially the Board will not be able to avoid a strategic refocusing, which would enable the realization of the hidden value of fresh dairy products, which at this stage is negative at 7 billion euros at the current price.

Analysts estimate that Vega represents less than 1% of total group sales, or less than 5% of the former WhiteWave scope in North America and less than 10% of the Danone group's Plant-Based sales, which amounted to 2.2 billion euros at the end of 2020, the analyst said.

Beyond Vega, analysts identify other assets that could be reviewed: baby food (Blédina, Mellin in Italy, Cow & Gate in the UK and Happy Family), liquid milk in Brazil/Russia/Morocco, water brands in Spain and potentially in Poland (Zywiec) and eventually the infusion business (Tubes) within medical nutrition.

Oddo believes that this type of deal is likely to take place over the next 18 months before the group makes any real strategic choices.

The Danone share is just about keeping afloat at about 59 euros in Paris.


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