Carlsberg: share price recovers, Morgan Stanley in support
January 20, 2025 at 11:03 am EST
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With a gain of over 2%, Carlsberg shares are one of the biggest risers on the Copenhagen Stock Exchange's OMX 25 index, following positive comments from Morgan Stanley.
The US investment bank has taken over coverage of the stock with an 'overweight' recommendation and a target price of DKK 900.
In a research note, the New York-based firm considers that concerns about the Group's debt levels, the sound execution of the business, possible tightening of alcohol-related regulations and exposure to the Chinese market are all elements that are now more than integrated into the share price.
From its point of view, the acquisition of soda maker Britvic should enable it to boost earnings per share (EPS) growth by generating synergies and enabling it to reduce its capital intensity through lower capital expenditure.
MS also states that it expects growth in the soft drinks market to outstrip that of the beer market.
With a P/E of 12x for 2025 and 10.5x for 2026, the US bank believes that Carlsberg shares are currently undervalued, both in absolute and relative terms.
Following these comments, the share price rallied by over 2%, after hitting lows since 2020 last week.
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Carlsberg A/S is one of the world's leading beer producers. Net sales break down by activity as follows:
- beer production and sales: 101 million hectoliters sold in 2023 primarily under the Carlsberg and Tuborg brands;
- production, bottling, and distribution of non-alcoholic beverages: carbonated beverages, energy drinks, and mineral waters (24.1 million hectoliters sold in 2022).
At the end of 2023, the group had 71 breweries located in Denmark, in the United Kingdom (3), in Poland (3), in Germany (3), in Western Europe (6), in China (26), in Asia (14), and in Central/Eastern Europe (15).
Net sales are distributed geographically as follows: Western Europe (50.7%), Asia (31.7%), Eastern and Central Europe (17.6%).
CARLSBERG A/S 
