Amcor stock falls after Raymond James reiterates Market Perform rating
On Wednesday, Goldman Sachs adjusted its stance on Nissin Foods Holdings (2897:JP) (OTC: NFPDF), downgrading the company's stock rating from Buy to Neutral and reducing the price target to JPY4,200 from JPY4,500. The revision comes after a reassessment of the company's financial projections and market performance.
Goldman Sachs analysts cited a downward revision in core operating profit forecasts for Nissin Foods Holdings for fiscal years 2025 to 2027, with expected decreases of 1.8%, 2.8%, and 3.9%, respectively. The new price target reflects concerns over the second-quarter results, which showed weaker momentum than anticipated, and the potential for continued slower growth in the U.S. instant noodle market, contrary to earlier projections.
The downgrade was influenced by several factors, including the stock's limited upside potential, which is now seen as 12% towards the target price, compared to an average of 16% for 19 companies under Goldman Sachs' coverage. Moreover, analysts expect that the core operating profits from Nissin Foods' existing businesses will not meet guidance in fiscal year 2025 and will remain flat year-over-year in fiscal year 2026.
The assessment also took into account the overall sector performance. Since Goldman Sachs initiated coverage of Nissin Foods Holdings with a Buy rating on October 4, 2023, the company's shares have fallen by 12%, underperforming the TOPIX, which has seen a 24% increase during the same period. This underperformance is attributed to slower than expected sales growth in the U.S., as indicated by Nielsen data.
Goldman Sachs' decision reflects a cautious outlook for Nissin Foods Holdings in light of recent market trends and sales data. The new price target and rating suggest a more conservative expectation for the company's stock performance in the near term.
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