BofA maintains Buy rating on Carlsberg, seeing significant upside
Shares in the Danish brewer are rebounding following yesterday's fall of over 2%, bolstered by positive comments from Bank of America. In early afternoon trading, the stock was up 2.5% at over DKK 881.
Analysts note that, after a strong start to the year, the stock has underperformed over the past two months (-4.57% since March 10) due to concerns regarding input costs and short-term volume dynamics. The US bank believes that these fears are overblown; while COGS (cost of goods sold) inflation is expected to be a headwind in 2027, it should remain manageable, especially as the robust volume momentum seen in Q1 is expected to continue through Q2 and the rest of the year.
The recovery is expected to be driven by alcohol-free beverages, double-digit growth in India, and renewed momentum in previously weak markets such as Laos, Vietnam and Ukraine.
Bank of America says that another key strength for Carlsberg is the acceleration of its deleveraging process. Its net debt/EBITDA ratio is expected to reach approximately 2.5x by December 2026, or even lower should it complete the potential IPO of its Indian subsidiary. In particular, faster-than-anticipated deleveraging could enable the company to resume share buybacks as early as 2027.
Consequently, analysts have reiterated their Buy recommendation on the stock, with a target price of DKK 1,060, representing about 23% upside potential.
Carlsberg A/S is one of the world's leading beer producers. Net sales break down by activity as follows:
- beer production and sales: 99 million hectoliters sold in 2025 primarily under the Carlsberg and Tuborg brands;
- production, bottling, and distribution of non-alcoholic beverages: carbonated beverages, energy drinks, and mineral waters (49 million hectoliters sold in 2025).
At the end of 2025, the group had 57 breweries located in Denmark, in Poland (3), in Germany (3), in the United Kingdom (2), in Western Europe (4), in China (27), in India (7), in Asia (3), and in Central/Eastern Europe (7).
Net sales are distributed geographically as follows: Western Europe (58%), Asia (21.6%), and Eastern Europe/Central Europe/India (20.4%).
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