Danone: disposal of Earthbound - Oddo says 'At last!'
(CercleFinance.com) - An analyst at Oddo BHF this morning considers Danone's announcement, made yesterday, of its sale of Earthbound to Taylor Farm group, saying that it is a transaction that "in itself is positive".
[This sale] should be welcomed by the market. Positioned on organic salads in the US, this asset had no reason to stay in Danone's portfolio. The business of salads meets economic logic that is not compatible with those of major group... Finally, Earthbound, which accounts for 10% of the Noram EDO's sales, has seen double-digit falls in the US market over the past 18 months in the over-crowded organic salad market. This decline has shaved off almost 2 points from the sales of the former WhiteWave. We are also assuming that this asset made an operating loss of about ten million dollars, Oddo BHF retains.
Evaluating the price of this disposal at between 200 million and 300 million dollars ("and in the best -case scenario"), Oddo is not changing its recommendation or target price on the Danone share, on which it confirms its buy rating and target price of 81 euros.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
[This sale] should be welcomed by the market. Positioned on organic salads in the US, this asset had no reason to stay in Danone's portfolio. The business of salads meets economic logic that is not compatible with those of major group... Finally, Earthbound, which accounts for 10% of the Noram EDO's sales, has seen double-digit falls in the US market over the past 18 months in the over-crowded organic salad market. This decline has shaved off almost 2 points from the sales of the former WhiteWave. We are also assuming that this asset made an operating loss of about ten million dollars, Oddo BHF retains.
Evaluating the price of this disposal at between 200 million and 300 million dollars ("and in the best -case scenario"), Oddo is not changing its recommendation or target price on the Danone share, on which it confirms its buy rating and target price of 81 euros.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.