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Rich, sweet and gooey, Lindt chocolates never last long after Christmas. But, appetising as they are, eat too many and indigestion may follow. The same rule applies to investment in the shares of the premium Swiss chocolatier.

For decades, Lindt stock has enjoyed steep earnings valuation multiples. Its price-to-earnings ratio of 36 times compares with 20 for Nestlé and 24 for Barry Callebaut. For a long time, this could be justified by organic growth of between 6 and 8 per cent. But as chocolate sales plateau in more mature markets, it is no longer clear this target will be met. Hard as this is to believe in the wake of Christmas overconsumption, not everyone wants to stuff themselves silly with chocolate. 

People are eating more healthily. Consider North America, Lindt’s biggest market, worth about one-third of its SFr4.3bn ($4.3bn) in annual sales. There, Russell Stover, the US chocolate group Lindt bought in 2014, has been pinning its hopes on sugar-free chocolate.

However, that may not be enough to stop sales slipping. A note from UBS estimates US sales growth for Lindt in recent months has been just 1.3 per cent. This compares with 4 per cent in the Nafta region in the first half. It is part of a longer term shift. Lindt’s US market share has slipped from 9.3 per cent in 2014 to 8.7 per cent this year. Unsurprisingly, Lindt is looking for growth elsewhere.

Sales in China doubled in the half year, it said. But per capita chocolate consumption there works out at just 10g, against more than 4kg in America and almost 9kg in Switzerland. There is some way to go before China’s $3bn sales rise to a more alluring level.

There is some hope for Lindt. Higher cocoa prices, from an expected El Niño weather phase, could sooth any potential dyspepsia. If higher prices ensued due to poor harvests, Lindt could later pass these on to consumers, protecting margins. That, however, is a big “if”. Lindt, for the time being, remains an expensive treat.