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雷达卡
European Food
Conventional Wisdom Sees Nestle More Defensive
than Danone; We Disagree
Food & Food Manufacture
Pablo E ZuanicAC *
(44-20) 7325-4664
pablo.zuanic@jpmorgan.com
J.P. Morgan Securities Ltd.
* Registered/qualified as a research analyst under NYSE/NASD rules
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Dissecting the Consensus View re Danone vs. Nestle
In this note we comment on the conventional wisdom view that Nestle may be a
better investment option than Danone in 2009, and explain in greater detail why we
prefer Danone vs. Nestle, and why we expect the Danone (OW) to Nestle (UW)
premium to expand this year to a 25% premium (historical peak) to Nestle vs. current
15% on FV/EBITDA our estimates (10.5x vs. 8.5x). The market’s overdone reaction
in our judgment to the companies’ 2008 sales trends (rewarding Nestle, penalizing
Danone) and expectations of a better 2009 for Nestle vs. Danone, make us believe
the valuation premium Danone/Nestle will expand in 2009 if the year plays out the
way we are projecting with Danone meeting guidance and Nestle missing it (we
project multiple expansion and mid teens earnings growth at Danone should result in
more than 20% upside and we project a TP of
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