On Wednesday, Citi reaffirmed its Buy rating on Heineken (AS:HEIN) NV (HEIA:NA) (OTC: HEINY (OTC:HEINY)), maintaining a stock price target of EUR105.00. The endorsement comes with expectations that the upcoming Q2 and H1 2024 earnings will demonstrate Heineken's progress toward reaching the higher end of its forecasted organic EBIT growth for the fiscal year 2024.
Citi's outlook is based on positive indicators from the first quarter, projecting continued strong performance into the second. Factors contributing to this forecast include a resurgence of consumer confidence in Europe, a stabilization of beer consumption in Vietnam, and robust sales in Mexico.
Despite potential slowdowns in Brazilian volumes and recent negative foreign exchange impacts from Mexico resulting in a 2% reduction to earnings per share estimates, Citi anticipates a 11.2% increase in organic EBIT growth for the first half of the year.
The bank's analysis suggests that Heineken is well-positioned to benefit from the upcoming summer season in Europe, as well as from revenue and profit boosts linked to major sporting events. These factors are expected to tilt the balance of earnings risks in a positive direction for the third quarter.
Citi's continued endorsement of Heineken, citing the company as its preferred choice within the beer sector, is rooted in these positive projections and the potential for Heineken to achieve around 8% consensus EBIT growth for the full year 2024.
In other recent news, Heineken NV has been the focus of several analyst reports. Deutsche Bank (ETR:DBKGn) reaffirmed its Buy rating on Heineken, anticipating solid performance in the company's upcoming first-half 2024 results.
The bank projects organic volume growth of 4.3% for the second quarter and expects organic revenue growth to stand at 8.1%. Furthermore, the adjusted operating profit is projected to reach €2,262 million, while the adjusted net profit is estimated at €1,289 million.
Jefferies also maintained a positive stance on Heineken, highlighting the company's robust first half of the year, encouraging trade performance, and increasing volumes in Europe. The firm noted Heineken's favorable position compared to other global staples, suggesting potential for growth in the company's share price.
On the contrary, RBC Capital adjusted its price target for Heineken to EUR77.00 but maintained an Underperform rating. The firm attributed Heineken's first-quarter sales exceeding expectations to technical factors and expressed skepticism about the sustainability of Heineken's price/mix growth due to broadly declining inflation. These are among the recent developments concerning Heineken.
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