UBS upgrades Emmi stock rating due to valuation reset and capital allocation shift

LootboxPhobia · 2026-03-03T11:37:03+00:00

UBS upgrades Emmi AG stock rating from Sell to Neutral, with the target price raised from CHF 700 to CHF 830. Due to valuation falling to a historic low, sales volume and cost efficiency are expected to improve. Emmi will shift focus to organic sales and capital return, with an expected organic sales growth of over 2% by 2026.

LootboxPhobia

2026-03-03 11:37:03

Abstract generation in progress

Investing.com - UBS upgrades Emmi AG (SIX:EMMN) stock rating from Sell to Neutral and raises the target price from CHF 700 to CHF 830, citing a significant reduction in valuation multiples and improved capital allocation priorities.

The Swiss bank states that Emmi’s valuation multiple has fallen from a historical range of 22 to 26 times earnings to about 18 times, now in line with broader food industry peers rather than trading at a premium.

UBS raises its 2026-2028 earnings per share estimates by 2% to 7%, reflecting better sales growth and cost efficiency. The firm also raises its mid-term sales growth assumption by 25 basis points to 2% and increases EBITDA margin forecasts by 25 basis points to 10.75%.

Emmi guides for 1% to 3% organic sales growth in 2026, with UBS and market consensus expecting 2% to 3%, despite nearly 100 basis points of negative impact from declining dairy prices on sales.

In terms of EBIT, the company targets CHF 335 million to CHF 355 million, while UBS estimates CHF 352 million and market consensus is CHF 349 million.

UBS states that with support from centralized procurement, productivity improvements, and sales growth, this guidance appears achievable.

The bank emphasizes that Emmi will focus on organic sales and return on invested capital over acquisitions in the next two to three years, representing a key improvement in capital allocation. Emmi has introduced a 10% mid-term ROIC target.

UBS notes that the company has recently achieved steady 2% to 3% year-over-year sales growth, benefiting from its niche positioning in high-margin dairy products such as premium cheese, cold brew coffee lattes, and Italian desserts, which account for about 40% of group sales.

UBS expects Emmi to show solid profit and margin progress in the first half of 2026 compared to a relatively easier comparison base.

The company forecasts organic sales growth exceeding 2% during this period, with EBIT margins improving by at least 10 to 20 basis points year-over-year.

UBS states that accelerating consumer demand for protein should support the company’s products, noting that about 23% of Americans follow high-protein diets, up from 4% in 2018.

This article was translated with AI assistance. For more information, see our Terms of Use.

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.