However, it is still a real setback for the French food group; since the end of the pandemic and the appointment of Antoine de Saint-Affrique has seen its share enjoy a strong run on the stockmarket, coupled with broad approval from shareholders after the missteps of the Faber era.

It is even a double piece of bad news for the group, one of whose key external growth priorities was precisely to double down on infant nutrition with the possible acquisition of US-based Mead Johnson, itself badly tarnished by various scandals in the past.

Grappling with a structural growth ceiling, and after its painful exit from Russia, Danone is being pressed by its shareholders to accelerate its external growth strategy. In autumn 2024, it made an extremely generous offer for kefir group Lifeway.

Failing acquisitions, it is the prospect of a possible disposal of assets in its bottled water segment - excluding Evian - that could whet the appetites of activist funds. Too competitive and not very profitable, this business does not offer the same potential as specialised nutrition.

As it stands, in the absence of any real improvement in results, and even after the recent drop in the share price, the valuation remains, in many respects, relatively high. 

All the more so as analysts, who have recently revised up their investment estimates over the next three years, are forecasting annual cash profit - or free cash flow - of €2.6bn on average between 2025 and 2027.

Set against a market capitalisation of €43bn - i.e., a multiple of 16x to 17x this expected earnings capacity - and a dividend yield of barely 3.3%, it is hard to see a truly attractive entry point here.

https://www.marketscreener.com/news/a-double-blow-for-danone-ce7e5bdbda8ff520