HSBC cuts Carlsberg stock price target on execution concerns

HSBC has reduced its price target on Carlsberg A/S stock from DKK1,000.00 to DKK980.00, maintaining a Hold rating. This decision comes after the bank expressed concerns about retail execution, particularly in the face of aggressive investments by Coca-Cola in digital capabilities and route-to-market strategies. Despite this, HSBC sees Carlsberg as an undervalued player in the Beverages industry, with the company's portfolio now comprised of 35% soft drinks.

The company's expansion into PepsiCo's soft drinks portfolio is driving volume growth and providing access to new points of sale. Key growth opportunities for Carlsberg include China, where industry growth is expected to normalize, and Vietnam, where stable market share is anticipated. In Western Europe, Carlsberg faces pressure due to macroeconomic factors and shifting competitive dynamics in mainstream beer markets. The company's dividend yield remains at 2.2%, and it has paid dividends for 26 consecutive years.