Danone Shares Drop 1.05% at Midday, Oddo BHF Lowers Target to 79 Euros
Danone falls 1.05% to 67.54 euros at midday on Monday, extending its series of declines following the announcement of a targeted recall of batches of infant milk. Oddo BHF lowers its price target from 84 to 79 euros while maintaining an outperform recommendation.
Continued Decline in Danone's Stock Amid Infant Milk Recall
Danone's stock fell 1.05% this Monday, January 26th, at midday, settling at 67.54 euros after opening at 67.68 euros. The stock thus extends its series of declines that began last week, with a weekly drop of 11.74%. The session follows the announcement on Friday evening of a targeted recall of limited batches of infant milk in certain markets, a decision presented as preventive by the company. No safety defects have been formally established, but the market remains nervous in a context of tensions around this strategic segment. The RSI is now at 28, indicating a technical weakness zone without reaching an extreme oversold level. The stock is significantly below its 50-day moving average, set at 76.21 euros, indicating a break in upward momentum. On Monday, Oddo BHF maintains its outperform recommendation while lowering its price target from 84 euros to 79 euros. Analysts note that the risk of spread can very likely freeze a rebound in the stock until the sector risk is resolved. This caution echoes market concerns following the recall of some batches in Singapore in mid-January after the detection of cereulide toxin.
Mixed Analyst Opinions on Danone's Performance
The Danone case has seen divergent analyst opinions since the beginning of the month. Following a drop of 8.42% recorded on Wednesday, January 21st, several research offices revised their positions. Barclays lowered its target from 85 to 83 euros on January 23rd while maintaining an overweight recommendation, whereas Bank of America reaffirmed its underperform recommendation with a reduced target from 70 to 69 euros on January 22nd. These adjustments reflect concerns related to the slowdown in birth rates in China, a market that accounts for about 13% of the group's sales and 30% of the adjusted operating income according to estimates. Technically, the stock is approaching its support threshold at 67.40 euros, a level now critical to avoid an acceleration of the correction. The group will publish its annual results for 2025 on February 20th. Investors will scrutinize Danone's ability to confirm its guidance of comparable sales growth between 3% and 5%, and a faster increase in its current operating income, in an environment marked by persistent sectoral and geographical uncertainties.
