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Investing.com -- UBS Global Research has upgraded its recommendation on HelloFresh SE (ETR:HFGG) to “buy” from “neutral” rating, citing improving visibility on both revenue trends and cost savings.
Shares of the German meal-kit company were up 9.5% at 07:20 ET (12:20 GMT).
The brokerage points to new analysis indicating revenue declines are likely to ease later this year, with a return to constant-currency growth expected by mid‑2026.
UBS also says the company appears on track to meet its €200 million net cost savings target by 2026, providing further support for its positive outlook.
The upgrade comes after UBS applied a proprietary cohort model to examine HFG’s customer base before and after its recent strategic changes.
This analysis suggests that top‑line declines should begin to slow in the third quarter of 2025, with constant‑currency revenue growth returning in the second quarter of 2026, at around 0.5%.
UBS forecasts the company could then sustain growth of about 3% in constant currency in the second half of 2026.
On the cost side, UBS benchmarked HFG’s expenses against historical performance, finding that the company has significant scope to improve efficiency.
UBS estimates that if HFG operated at prior peak efficiency levels in fulfilment, procurement, and general and administrative costs, the potential gross savings could approach €600 million.
Given that HFG has already delivered €150 million in savings, UBS believes the €200 million net savings target is achievable, and that there is headroom to offset possible operational challenges. Fulfilment and G&A efficiencies are expected to be the main levers driving this improvement.
The brokerage says the outlook reflects a shift in their view. They had previously adopted a “neutral” stance amid uncertainty over when revenues would stabilise and the depth of restructuring required.
UBS now sees greater clarity, with evidence of a path to both stabilising revenues and delivering on cost efficiency.
UBS has adjusted its forecasts accordingly. Revenue growth for FY2025 in constant currency remains unchanged at negative 8.3%, in line with company guidance of negative 6% to negative 8%.
For FY2026, UBS raises its forecast by 1.2 percentage points year‑on‑year. Adjusted EBITDA forecasts are slightly lowered for FY2025 but raised by 11% for FY2026, with overall changes driven by foreign exchange and underlying cost assumptions.