The average target price of HEIO.AS is 113 and suggests 64% upside potential. Usually, this means a BUY recommendation among investment firms, or a recommendation to increase one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 113.0. This translates into 64% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 113.0. This suggests 64% upside potential. Even the most pessimistic analyst believes there will be stock growth. 

Heineken Holding N.V., through its subsidiaries, engages in the brewing and selling of beer and cider. The company's portfolio consists of approximately 300 international, regional, local, and specialty beers and ciders. It operates in Africa, the Middle East, Europe, the Americas, and the Asia Pacific. The company was founded in 1864 and is based in Amsterdam, the Netherlands. Heineken Holding N.V. operates as a subsidiary of L'Arche Green N.V.

Netherlands

Heineken Holding N.V.

Consumer Defensive

The company has a track record of regular dividend payments. It has paid dividends in each of the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has been good and slightly above its peers. On average, the company pays dividends twice a year. 

HEIO.AS reported revenue of EUR 29 821mn in the last 12 months, down 2% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 56% from FY23 to EUR 1.82. Market expects EPS to reach EUR 3.27 in FY25.

Over the past six months, the stock has consistently climbed, resulting in 16% total increase. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Over the past six months the stock has exceeded the performance of this peer group by 13ppts and its growth accelerated by 3ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported average EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 20.9% in the last 12 months, up from 17.7% in FY23. 

Historically, HEIO.AS has reported modest net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 1.7%, down from 3.9% in FY22. 

Heineken Holding N.V. reported a return on equity (RoE) of 5.2% in the last 12 months, up from 5.1% in FY23. The market consensus projects an RoE of 4.1% in FY24, again behind its peers. 

Another important profitability metric, return on assets (RoA), amounted to 0.9% in the last 12 months, a decrease from 0.9% in FY23. The market analysts predict that RoA will be 0.8% in FY24, again weaker than its peers. 

In the last 12 months, the return on capital employed (RoCE) declined to 1.2%, below the peers. The consensus estimate for FY24 for RoCE is 5.7%, again behind the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 1.4 in the past several years. This ratio implies a average shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

HEIO.AS has above average trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is usually quite stable and becomes extremely unfavourable on the days with the lowest activity. However, under highly turbulent market conditions, the trading volume tends to improve significantly. 

No other major risks have been identified.

The risk of default is moderate. We note strong positions in its industry, among the positive credit factors. Among the negative credit factors and we point to slow historical revenue growth, negligible return on capital.

In highly turbulent market conditions, HEIO.AS is not volatile. In other words, the stock will fall far less than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be very low. 

In normal market circumstances, HEIO.AS is not volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will stay within a narrow range. The stock's losses on its worst days (less than 1-5% of the time) will range from very low to negligible. 

Based on key historical and expected multiples, the stock is slightly undervalued relative to its peers. In particular, the stock is reasonably priced on P/E, 'cheap' on EV/EBITDA, undervalued on P/FCF. 

Heineken Holding N.V.

€ 68.7

6

Heineken Holding N.V.

€ 68.7

6

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

€ 68.7

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