Bad news priced in, Bernstein turns more constructive on European food&HPC sector
21/05/2024 12:02
** Bernstein is of opinion that short-term bad news for the
European food and household & personal care (HPC) sector is
priced in, and it sees little macroeconomic scenarios with
further downside
** As economic growth continues slowing down while
disinflation is not happening, it expects investors to start
looking for "safe havens," driving the sectors' outperformance
** Given weakest sector performers' ability to rebuild
profitability faster in current macroeconomic conditions,
Bernstein finds it hard to have absolute "underperforms," and
hence the upgrades on Henkel HNKG.DE and Orkla ORK.OL
** Brokers' favourites remain Haleon HLN.L with its good
set-up into Q2, Lindt LISN.S with its strong pricing power,
and L'Oreal OREP.PA with its potential for earnings growth
** It keeps Danone DANO.PA at the other end of the
rating scale at "underperform," still having a dislike for the
company's turnaround story
COMPANY NEW RATING OLD RATING NEW PT OLD PT
Henkel Market-Perform Underperform EUR 72 EUR 55
Orkla Market-Perform Underperform EUR 84 EUR 74
(Reporting by Chiara Holzhaeuser)
((Chiara.Holzhaeuser@thomsonreuters.com))