Danone - High Noon - 2018 a defining year as productivity initiatives take centre stage

Davy Research
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2018 will be a defining year for Danone – equity performance hinges on the success of its productivity initiatives. Its productivity programme has taken on greater significance in light of rising supply chain costs in North America. Notwithstanding this, we are more constructive on the equity due to the scale of self-help measures, a more benign outlook for dairy prices and momentum in Specialized Nutrition (SN). While the risk/reward profile is becoming more favourable, we have left our ‘Neutral’ rating unchanged as we await further visibility on key initiatives.