Citi has expressed continued confidence in Heineken (AS:HEIN) NV (HEIA: NA) (OTC: HEINY (OTC:HEINY)), maintaining a Buy rating and a price target of EUR99.00.
The firm acknowledged that after a period of earnings downgrades and communication issues, investor trust in Heineken's ability to deliver on its earnings has waned.
Citi's analysis suggests that while the consensus estimates for Heineken have recently declined, it may be premature to dismiss the company's potential.
The firm anticipates an improvement in both sales volumes and profit margins for the fiscal year 2025 as market challenges lessen and the company adopts a clearer strategy for guidance and communication.
The analyst from Citi noted that despite the stock's unpredictability in recent years, Heineken is poised to establish itself as a stable growth stock as envisioned by its CEO and CFO. However, Citi also recognizes that it will take time and a track record of consistent performance for this to be fully appreciated by investors.
Citi referred to Heineken as a "show-me" stock, implying that the company must demonstrate its capabilities to gain investor confidence. Despite a lack of immediate catalysts for a sustainable re-rating of the stock, Citi believes that the potential reward outweighs the risks.
The firm projects over 28% upside for Heineken in the next 12 months, recommending investors to maintain their positions in the stock.
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