Lindt & Sprüngli

Note: This is a daily stock update and the information stands true as of 04/03/25, 09:00 CET.

Company Update: FY results were a slight beat with a 2% beat at the EBIT level (sales had already been published).

Guidance for 2025 is reiterated but it is fully included in the consensus already.

Expert Opinion:?Valuation is high with PE25 and 26 at 36 and 32x respectively. EV/EBITDA stands at 17x, below the historical 10y average of 19x but still a very high level. Lindt remains a fantastic company (very solid balance sheet, excellence in its products, mastering part of its network distribution, high on innovation in a otherwise challenged market…). This will likely remain. But we see some reasons for concerns.

Firstly, we believe the consensus is too high for H1 (notably as there were one offs in H1 24 which boosted profits).

Secondly, 2025 will be the first year with negative volumes and we will see how that will impact the operating margin, meaning there is a slight risk of weaker operating profit than expected (unless they adjust through marketing expenses but which will impact growth down the line).

Last but not least, we still wonder whether the widening use of GLP1 agonist drugs will impact the demand for sweets and chocolates over the long run.

In all, and once again despite the high fundamental quality of the company, the risk reward is now negative. No reason to remain long of Lindt, at least over the short term.??

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AlphaValue, founded in 2007 by Pierre-Yves Gauthier and André Le Grand, has become the leading provider of independent European equity and credit risk research. We offer agnostic analysis of business models and valuations, helping clients assess their investment risks and opportunities.