In a report released today, Richard Edwards from Goldman Sachs upgraded Koninklijke Ahold Delhaize N.V. (0RI8 – Research Report) to a Buy, with a price target of €40.00.
Richard Edwards has given his Buy rating due to a combination of factors, primarily focusing on the robust sales growth in both the US and European markets. The US market is showing signs of acceleration in food and grocery spending, with a notable increase from around 2% in the first quarter of 2024 to over 3% by the end of the year and into January 2025. This growth is complemented by a successful turnaround plan in the US, where strategic price investments and store refurbishments have resulted in improved net promoter scores and positive sales trends.
In Europe, the company benefits from strong sales trends, particularly with like-for-like sales excluding tobacco and fuel tracking over 4% since the second quarter of 2024. The Belgian market is also recovering well following a transformation to an affiliate model. Furthermore, the forecasted earnings per share for fiscal year 2025 is expected to increase by approximately 8%, supported by revenue growth and improved earnings before interest and taxes. The valuation of Koninklijke Ahold Delhaize N.V. has led to an increased 12-month price target of €40, which suggests a favorable risk-adjusted return, justifying the Buy rating.
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