{BN FP Equity UNA NA Equity GRT D<GO>}
* Danone - (€52)
- Stock has UP Unilver by 11% YTD, performed in line with EuroStoxx Food & beverage
- Street consensus is on hold mode (50% on Hold, 20% Sell, 20% buy) as most of big house are negative on the name
- Stock is trading in line with peers valuation with some risk as last set of results was not great but better than consensus.
- Margin Focus on H2 will be the catalyst for investors to change their view
- Investors still pricing a possibility of an expensive M&A in the US (Mead Johnson - trading on hist, high after numbers yest, €13bil mkt cap at that price) that will be a bad news for Danone regarding the poor record of the company in M&A. Deal could only happen with another predator that could be less negative
- Russian exposure has been a negative point also for the company
- Structure of Capital make the company weak in term of any investors keen to build a stake and move the governance (the stock has been under scrutiny of few activist)
- Next catalyst will be the investor event in NY on 23rd/24th of June
- on a chart point of view the stock is trading not far from good support 51.10,.
I expect the stock to trade in line with market
* Unilever - (€30.10)
- Stock has OP SX3P (Food & Beverage) by 5% YTD
- Stock has rebound on Good Growth & consumption Prospect in the US, on EM exposure and portfolio and business review and cession market fully valued that and will wait for much more to take the stock higher
- Stock looked pretty well priced here in line with peers with very few new positive catalysts
- On a chart point of view 31.2 appears to be a strong resistance, I expect the stock to come back on the 28.75 levles
- I expect the stock to UP the market reagrding performance and catalyst fading
The Spread is trsading on the 1.7243 ratio level, I expect the srpead to come back quickly on the 1.80 level thjat will be my target (+4.5%)