reports
- Philip Gorham
- CFA
- FRM
Danone Reports Spectacular Performance in China Formula; Only Modest U...
Danone reported another respectable first quarter, with organic growth continuing to accelerate. The company is now clearly outperforming many of its rivals, including Nestle. Organic growth of 4.9% was a whisker short of our forecast but beat consensus estimates comfortably. We are reiterating our EUR 71 fair value estimate and narrow moat rating and believe that after the mini-rally in recent days, only very modest upside to Danone's intrinsic value remains. Danone's first-quarter organic grow...
- Philip Gorham
- CFA
- FRM
Danone's margin-expansion story is now better understood.
Narrow-moat Danone reported a respectable fourth quarter that beat our forecasts on an organic basis, but weaker-than-expected tailwinds from portfolio changes and foreign exchange meant the firm narrowly missed our revenue and operating income estimates. Guidance of double-digit earnings growth in 2018 is in line with our forecast, although we may dampen our near-term assumptions to account for the recent strength in the euro and rising commodity inflation. We are unlikely to materially change ...
- Philip Gorham
- CFA
- FRM
We continue to like Danone's margin-expansion opportunity.
Danone reported first-quarter sales that were in line with both our expectations and consensus. We reiterate both our EUR 71 fair value estimate for the shares and our narrow moat rating. Danone is a conglomerate of businesses with competitive advantages (early life nutrition and medical nutrition) and businesses in very competitive categories (bottled water and dairy). This played out very clearly in the bifurcated sales performance of Danone’s product segments in the first quarter. Organic g...
- Philip Gorham
- CFA
- FRM
In line third quarter for Danone as market continues to overlook margi...
Danone reported first-quarter sales that were in line with both our expectations and consensus. We reiterate both our EUR 71 fair value estimate for the shares and our narrow moat rating. Danone is a conglomerate of businesses with competitive advantages (early life nutrition and medical nutrition) and businesses in very competitive categories (bottled water and dairy). This played out very clearly in the bifurcated sales performance of Danone’s product segments in the first quarter. Organic g...
- Philip Gorham
- CFA
- FRM
Positive Signs in ELN in Danone’s 1Q But Volume-Driven Margin Growth...
Danone reported first-quarter sales that were in line with both our expectations and consensus. We reiterate both our EUR 71 fair value estimate for the shares and our narrow moat rating. Danone is a conglomerate of businesses with competitive advantages (early life nutrition and medical nutrition) and businesses in very competitive categories (bottled water and dairy). This played out very clearly in the bifurcated sales performance of Danone’s product segments in the first quarter. Organic g...
- Philip Gorham
- CFA
- FRM
Thesis and Valuation Intact as Danone Lowers Fiscal 2016 Growth Guidan...
Danone updated its full-year forecast Dec. 19, revealing that it is likely to miss its previous top-line guidance as a result of weakness in the dairy segment in Europe but exceed its guidance for the group-level operating margin by 10 basis points. We have trimmed our 2016 dairy segment organic growth assumption by 30 basis points to 1.7%, but the change is neutral to our 2016 earnings forecast and fair value estimates of EUR 71 for the ordinary shares and $16 for the ADRs. Our narrow moat rati...
- Philip Gorham
- CFA
- FRM
In-line third quarter for Danone as market continues to overlook margi...
Danone's missed our internal forecasts for sales growth in the third quarter by a whisker. We have trimmed our full-year growth forecast by 30 basis points, but this does not affect our fair value estimates of EUR 71 for the ordinary shares and $16 for the ADRs. Our narrow moat rating and our investment thesis remain intact, and we continue to expect medium-term margin expansion at the early-life nutrition, or ELN, business to drive high-single-digit organic free cash flow growth over the next f...
- Philip Gorham
- CFA
- FRM
Thesis on Track as Danone Misses by a Whisker in Q3
Danone's missed our internal forecasts for sales growth in the third quarter by a whisker. We have trimmed our full-year growth forecast by 30 basis points, but this does not affect our fair value estimates of EUR 71 for the ordinary shares and $16 for the ADRs. Our narrow moat rating and our investment thesis remain intact, and we continue to expect medium-term margin expansion at the early-life nutrition, or ELN, business to drive high-single-digit organic free cash flow growth over the next f...
- Philip Gorham
- CFA
- FRM
Acquisition Process Continues for No-Moat WhiteWave; Raising Fair Valu...
We are raising our fair value estimate for no-moat WhiteWave to $55 per share from $54, reflecting the time value of money after the company’s second-quarter 2016 earnings report. Year to date, the firm reported a 14% net sales increase along with a 9.3% adjusted operating margin (up 61 basis points), compared with our 12% and 10% full-year standalone expectations, respectively. In July, the company announced it was being acquired by narrow-moat Danone for $56.25 per share; WhiteWave indicated...
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