Bad news priced in, Bernstein turns more constructive on European food&HPC sector
** Bernstein is of opinion thatshort-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
** Aseconomic growth continues slowing down while disinflation is not happening, it expects investors tostart 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
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