HEINY - Heineken lands higher price target from Deutsche Bank with profit outlook improved

2023-04-24 06:56:17 ET

Deutsche Bank lifted its price target on Heineken N.V. ( OTCQX:HEINY ) on Monday on the view that the beer company's growth algorithm is worth much more.

Analyst Mitch Collett and team said Heineken ( OTCQX:HEINY ) signaled its desire to adjust the balance of its profit growth algorithm at its 2022 investor seminar with greater contributions from price, mix and a new 'cost-conscious culture'.

While the firm noted that input cost volatility means investors are unlikely to see the new algorithm in FY23 or FY24, DB does expect strong profit growth in both years.

"For FY25-27, we believe the company offers a compelling 10% operating profit growth algorithm, driven by 1% volume, 2% mix, 3% price and 4% from margin expansion. We do not believe this level of delivery is even close to being reflected in the current valuation with the shares trading at a material discount to staples."

Deutsche Bank's new price target on Heineken ( OTCQX:HEINY ) is €145 vs. the prior price target of €123.

More on Heineken:

• Read the latest analysis on Heineken from Seeking Alpha analysts
• View the growth metrics
• See the comparison to sector peers
• Dig into the Seeking Alpha Quant Rating
• Read why Boston Beer is an unlikely takeover target for Heineken

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