Danone Falls by 9.08% in Session, Shares Under Pressure at 66.92 Euros

Significant Technical Breakdown

Danone's stock is now significantly below its 50-day moving average set at 76.85 euros, marking a significant technical break after several already difficult sessions. The stock is now slightly below its 200-day moving average located at 74.00 euros, thus crossing an important psychological threshold for investors. The RSI is at 34, indicating a zone of relative weakness without signaling extreme overselling, which still leaves room for a possible further adjustment. The movement comes after a series of mixed analyst revisions at the beginning of the month. Deutsche Bank downgraded its recommendation from buy to hold on January 13, lowering its price target from 74.00 to 67.00 euros, a level now close to the current price. The bank is particularly concerned about the slowdown in Chinese birth rates, which fell by 17% last year. The infant milk market there is indeed one of the strong pillars of Danone's activity. Conversely, UBS raised its target from 86.00 to 95.00 euros on January 12 while maintaining its buy recommendation, and Bernstein upgraded its advice to outperform with a target raised from 83.00 to 92.00 euros on January 7. This divergence of views illustrates the ongoing uncertainty around the valuation of the stock.

Challenges Despite Strong Quarter

The decline occurs as the group posted a solid third quarter at the end of October, with revenues of 6,876 million euros up 4.8% on a like-for-like basis, driven particularly by a 13.8% growth in China, North Asia, and Oceania. Danone reaffirmed its 2025 targets, aiming for revenue growth of between 3% and 5% on a like-for-like basis, with current operating income growing faster. However, the stock remains exposed to tension factors, including unfavorable exchange rate effects which weighed 5.1% on the published revenue in the third quarter, and difficulties in certain markets such as waters in Mexico. Moreover, social tensions related to the announced closure of the Blédina factory in Villefranche-sur-Saône led to employee mobilization on January 20 during a managers' convention in Lyon, adding a social dimension to the group's operational context. Strategically, Danone continues its targeted acquisitions, particularly in medical nutrition in the United States with Kate Farms and in Belgium with The Akkermansia Company, as part of its Renew Danone plan focused on health and innovation. The upcoming annual results expected on February 20, 2026, will be scrutinized to confirm the group's ability to meet its commitments in a volatile environment.