Asia stocks rise: Japan surges on Takaichi bets, China buoyed by positive GDP
Investing.com - UBS upgraded Koninklijke Ahold Delhaize NV (AS:AD) (OTC:ADRNY) from Sell to Neutral on Thursday, while raising its price target to EUR36.00 from EUR28.00.
The upgrade comes as the Dutch-Belgian grocery retailer approaches the anniversary of its U.S. price repositioning strategy, which had previously driven margin declines. UBS noted that over the past three quarters, U.S. and group EBIT margins fell by approximately 30 and 18 basis points respectively.
Looking ahead to fiscal year 2026, UBS projects a more stable outlook as the company annualizes the U.S. price cuts that began in Q4 2024. The firm also anticipates improved U.S. topline trends and benefits from Profi synergies in European operations, potentially pushing EU margins above 4% for the first time since fiscal 2021.
UBS raised its Group EBIT and EPS forecasts for FY26/FY27/FY28 by 4%/4%/5% and 5%/5%/6% respectively. The firm highlighted Ahold Delhaize’s current 13x price-to-earnings ratio, which has not experienced the re-rating seen among UK competitors.
The analysis pointed to Ahold Delhaize’s shareholder-friendly capital allocation history, including approximately 31% reduction in share count over the past decade through buybacks, as a positive factor amid challenging conditions in the broader consumer staples sector.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.