08 May, 2007

Europe: Heineken price target raised to 41 euro from 39 euro at UBS

Heineken price target raised to 41 euro from 39 euro at UBS, AFX News Limited reported May 8. UBS Analyst Melissa Earlam explained the price target hike in a note to clients, saying she believes that "2007 should have started well" for Heineken, "with European volumes in general helped by warm weather." She also expects "easy" year-on-year comparisons for operations in Italy, France and Russia. "Furthermore, we believe the pricing environment could be getting more benign for brewers in Western Europe in light of input cost pressures to try to protect margins," the analyst said.

Earlam anticipates that an upcoming conference in Miami will highlight "a strong US outlook." She expects US momentum to offset the effects of "less favourable weather" in northeastern states.

UBS estimates underlying net profit growth of 10-13 pct for 2007, ahead of Heineken's own 10-13 pct guidance. Anticipating growth, the analyst said the share are trading at a discount to the sector, justifying a price target upgrade.

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