JDE Peet's Fiscal 2022 Results in Line With January Prerelease; Europe Disappoints Due to Delistings

JDE Peet's reported fiscal 2022 results in line with preliminary fiscal 2022 results released at the company's strategic update on Jan. 24. Organic sales growth was up 11.3%, behind company-compiled consensus (at 13%), but broadly in line with our full-year estimate (11.8% in our model) and adjusted EBIT was 6% lower versus 4% lower in our model and 3% lower for consensus. Performance was largely in line with guidance given earlier in the year (double-digit organic sales growth in fiscal 2022, but a stable level of gross profit compared with last year as well as free cash flow of over EUR 1 billion versus EUR 1.36 billion realised). Medium- to long-term targets of 3%-5% organic sales growth, mid-single-digit organic adjusted EBIT, and 70% cash conversion are unchanged. Management confirmed guidance for fiscal 2023 with organic sales growth at the high end of its medium-term range of 3%-5% and low-single-digit organic adjusted EBIT growth compared with 4% organic growth and 5% EBIT growth in our model. Therefore, we don't expect to materially alter our EUR 36.50 fair value estimate. JDE Peet's is one of our top picks in European consumer packaged goods, with shares trading in 4-star territory.