Carlsberg : A beer with a twist - Coverage initiated at Outperform and DKK 985 TP
We initiate coverage on Carlsberg with an Outperform recommendation and a DKK 985 TP, valuing the brewer at 12-month EV/EBITDA of 10.7x, EV/EBIT of 14.7x, and P/E of 15.8x. All three European listed brewers in our coverage universe have an attractive valuation. However, we prefer Carlsberg because of its geographical exposure – with a focus on less volatile Europe and Asia – and because of its 30% soft drink exposure, which we conclude is synergistic to beer, adds to growth, and is less debated by investors if they move away from alcoholic beverages.Carlsberg is engaged in the production and sale of beer and other beverages. Co.'s brewing operations are concentrated in Northern and Western Europe, Eastern Europe and Asia, while markets outside these regions are serviced through exports and production under license. Co.'s other beverages include soft drinks, water and cider. In addition to beverage activities, Co. is also engaged in real estate.
Oddo Securities provides securities brokerage and research services. The company offers equity, economic, and derivatives research and credit analysis services. It focuses on insurance, automotive, building materials, pharmaceuticals, telecommunications, information technology, and agri-food industries.
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