(New: Price development updated, analyst of Societe Generale.)

FRANKFURT (dpa-AFX Broker) - After Hellofresh withdrew its medium-term targets, many investors pulled the ripcord on Friday. Analysts speak of a further blow to the credibility of the management after a major disappointment in November. The Hellofresh share price plummeted by more than 40 percent.

In the morning, the shares were trading at 6.72 euros, around 43 percent down on the previous day. This is the largest share price loss in the company's history. The shares last cost less at the beginning of 2019. At 5.82 euros, they would reach a record low.

Previously, Group CEO Dominik Richter had set himself the target of achieving a turnover of ten billion euros by 2025. Ten percent of this - or one billion euros - was to be retained as operating profit (adjusted EBITDA). However, this is unlikely to come to fruition, as there are already further signs of weak business in the current year.

According to the company, adjusted operating profit is likely to slump to between 350 and 400 million euros in 2024. According to preliminary findings, this result had already fallen from EUR 477 million to EUR 448 million in the past year.

Analyst Emily Johnson from the British Barclays Bank sees the cut targets for 2024 as another disappointment, after the company had already rowed back for 2023 in November. The company's outlook for adjusted operating profit in 2024 is more than a third below the average market expectation. "There are many questions for the analysts' meeting in the morning," said the expert.

In an initial reaction, analyst William Woods from Bernstein Research wrote that the company attributed the pressure on margins to costs for new production facilities and marketing, as well as the fact that the fixed cost ratio per cooking box is rising due to lower sales. For him, however, it is also a sign of the pressure on the business model itself. Growth depends on heavily discounted advertising offers.

After the management had to slash its targets for 2023 back in November, the latest news is further undermining the credibility of the company's management, according to Woods.

Simon Baker from French bank Societe Generale agrees: "The credibility of the Group's forecasts has been seriously damaged." Not so long ago, management had emphasized that the problems were only temporary and would not have a major impact on 2024 - and now this lowering of profit targets. Baker doubts that Hellofresh will be able to regain the trust of its investors in the near future.

The reason for the forecast cut in November was problems in the most important single market, the USA. The ramp-up of the new production facility in Arizona, where ready meals are to be produced, was delayed. At that time, the share price fell by more than 22 percent within one day.

Friday's share price slump brings the loss since the warning in November to 67%; Hellofresh's market value has melted to less than 1.2 billion euros. The slide since the end of 2021 continues.

During the peak of the coronavirus pandemic, food suppliers such as Hellofresh were still among the favorites of investors. Restaurants were closed, people stayed at home, ordered ready-made meals or cooked a lot themselves. The share price shot up accordingly - from less than ten euros before the pandemic to almost 100 euros in November 2021.

Hellofresh went public towards the end of 2017 with an issue price of 10.25 euros per share./mis/ngu/ag/men