Ahold Delhaize presented a decent set of numbers at the latest investor update. The new strategy, however, signals caution and a catalyst for stock price appreciation is missing. Shareholder returns depend on modest dividend growth and consistent share buybacks, with potential risks including exchange rate effects and competition from discounters.
As consumers, especially younger generations, grow accustomed to having their needs met at a rapid pace, Ahold Delhaize is seeing shoppers be less loyal to specific brands.
Ahold Delhaize is #5 largest grocery business in the USA, but may be flying under the radar of US-based investors as a European holding. Increasing scale of the online grocery and private labels are expected to improve margins long-term. A spinoff of Bol.com, the largest e-commerce platform in Benelux, valued at over $6b, can unlock significant value for shareholders.
Ahold Delhaize is a Dutch grocery chain operator generating the majority of revenue in the US under the Food Lion and Hannaford brands. The current share price is 27.82 EUR with a market cap of 26.1B EUR, reaching 2025 EPS early and reiterating full-year guidance. Q1 results show a slight increase in revenue and a decrease in gross profit and reiterated the full-year outlook with a focus on free cash flow and dividend growth.
Investors interested in stocks from the Consumer Products - Staples sector have probably already heard of Ahold NV (ADRNY) and Kimberly-Clark (KMB). But which of these two companies is the best option for those looking for undervalued stocks?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Here is how Ahold NV (ADRNY) and Associated British Foods PLC (ASBFY) have performed compared to their sector so far this year.