JDE Peets Brewing Beyond Bean Price Hurdles

This morning, we initiate coverage on JDE Peet's with a Buy rating and € 24.0 TP. JDE Peet's is the largest pure-play coffee and tea company for in-home consumption. Through is portfolio of leading brands such as L'OR, Peet's and Jacobs, the group is well positioned to capture underlying market growth driven by increased consumption per capita and premiumization. While record bean prices could weigh on results in the short-term, we expect this effect to be temporary. Finally, we believe the group's strong FCF profile leaves room for increased shareholder remuneration over the medium term.