- Swiss premium chocolate company Lindt & Sprüngli has recovered most of its early-FY20 losses.
- The pandemic caused profit to collapse in the first half of 2020, while management guidance points to a circa 40% profit decline for FY20 as a whole.
- Profit margins will recover to Pre-COVID levels only from FY22, with its previously reliable high single-digit growth set to continue thereafter.
- At CHF 85,000, the shares trade at around 40x pre-COVID EPS. Ultra-low interest rates can support that in the medium term.
- Valuation multiple contraction remains the big long-term risk for investors.
For further details see:
Lindt & Sprüngli AG: Increasingly Expensive At 40x Pre-COVID Earnings