RBC Capital lifts Heineken stock rating, raises target to EUR80

On Wednesday, Heineken NV (HEIA:NA) (OTC: OTC:HEINY), currently valued at $44.92 billion, received a stock rating upgrade from RBC Capital, moving from ’Underperform’ to ’Sector Perform’. The firm also increased its price target on Heineken (AS:HEIN) shares to EUR80.00, up from the previous EUR75.00. The adjustment comes as RBC Capital analysts revised their expectations for the beer giant, anticipating an improvement in earnings before interest and taxes (EBIT) margins. According to InvestingPro data, the company maintains strong fundamentals with $32.8 billion in revenue and a healthy EBITDA of $6.3 billion.

The upgrade was influenced by the analysts’ belief that Heineken is unlikely to experience further significant declines in EBIT margins. Drawing parallels to Carlsberg (CSE:CARLb)’s performance between 2016 and 2018, RBC Capital suggests that under-invested beer brands often rebound swiftly with the right amount of investment and management attention. Based on this outlook, RBC Capital has raised its 2026 EBIT forecast for Heineken by 14% and earnings per share (EPS) by 20%. The latter reflects the impact of Heineken’s €1.5 billion share buyback program. InvestingPro analysis reveals the company’s strong track record, having maintained dividend payments for 33 consecutive years, with a current dividend yield of 1.54%.

The analyst’s statement highlighted that the increase in the price target to EUR80.00 is slightly less than the rise in EBIT forecast. This is due to a concurrent rise in the firm’s capital expenditure forecast relative to depreciation. Despite the positive adjustments, the new price target represents a modest 7% increase from the previous figure.

Heineken’s stock may respond favorably to RBC Capital’s updated outlook, especially with the firm’s endorsement of the company’s potential for a turnaround similar to that experienced by Carlsberg. The upgraded rating and increased price target reflect RBC Capital’s revised expectations for Heineken’s financial performance over the coming years.

In other recent news, Heineken has been the focus of several analysts’ reports. Citi maintained its Buy rating for Heineken, setting a price target of EUR95.00. The firm’s analysts, led by Simon Hales, expressed optimism about Heineken’s prospects for 2025, despite potential challenges. They anticipate favorable conditions for Heineken investors in 2025, with the company possibly benefiting from recent foreign exchange movements.

Meanwhile, BofA Securities revised its price target for Heineken, reducing it from EUR 99.00 to EUR 85.00, while still recommending a Buy rating. The analysts expect Heineken to guide towards and achieve a 4-8% increase in organic earnings before interest and taxes (EBIT) for 2025.

On the other hand, Deutsche Bank (ETR:DBKGn) downgraded Heineken from Buy to Hold and reduced its price target to €76.00. The bank’s analysis acknowledged Heineken’s diverse global presence and its strong position in the premium and non-alcoholic beer segments as positive factors.

CFRA raised the stock’s rating from Hold to Buy while maintaining a price target of €86.00. The upgrade reflects the firm’s confidence in Heineken’s strong branding and its potential for long-term growth despite recent challenges.

In the European beverages sector, Bernstein noted cautious optimism toward the U.S. alcohol market and potential easing of Chinese tariffs on Cognac. The firm’s top picks in the beer segment are Carlsberg and Heineken. These are recent developments in the world of investment analysis.

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