Tue Sep 17 07:24:27 UTC 2024: ## Barclays Upgrades Lindt & Spruengli to “Overweight” as Cocoa Prices Expected to Fall
**ZURICH, SWITZERLAND** – Investment bank Barclays has upgraded its rating on Swiss chocolate maker Lindt & Spruengli (LISN:SW) (OTC: LDSVF) from “Equalweight” to “Overweight,” citing the potential for declining cocoa prices and the company’s impressive growth trajectory. Barclays also raised the price target to CHF 120,000 from CHF 110,000.
The upgrade stems from expectations of improved cocoa harvests in West Africa, which could reduce cost of goods sold (COGS) pressures for Lindt. Barclays believes the company is well-positioned to adjust its pricing strategies to maintain and even exceed its projected margin growth, which is at the higher end of its 20-40 basis points margin range.
This optimism is fueled by Lindt’s consistent track record of organic growth, consistently surpassing its own top-line guidance. Over the past three years, Lindt has reported a remarkable 35% aggregate organic growth, including a 13% increase in 2021, followed by 11% in 2022 and 10% in 2023. This performance demonstrates Lindt’s ability to navigate significant inflation in cocoa raw material costs.
In a significant move, Barclays also significantly raised its rating for Barry Callebaut, marking the first instance of both major European chocolate companies receiving “Overweight” recommendations concurrently. The firm has also expressed a preference for Mondelez (NASDAQ:MDLZ) in the U.S. Food sector, acknowledging its leadership in chocolate and snacking.
Barclays’ bullish outlook for Lindt highlights the company’s potential to double its chocolate market share in the long term. The investment bank views Lindt as a standout growth stock within the European Staples sector.
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