Last Update 11 Dec 25

VRLA: Net Zero 2040 Climate Progress Will Support Future Share Upside

Analysts have modestly reduced their price target on Verallia Société Anonyme, trimming it by EUR 1.50 overall, as they factor in slightly more cautious assumptions while still maintaining a positive outlook on the shares.

Analyst Commentary

Recent research updates reflect a fine tuning of assumptions rather than a shift in the overall investment case, with price targets edging lower but Buy ratings being reaffirmed.

Bullish Takeaways

Bullish analysts continue to see upside to the current share price, even after modest target cuts, suggesting that the long term growth story and earnings trajectory remain intact.
The maintenance of positive recommendations indicates confidence in Verallia Société Anonyme's ability to execute on cost efficiencies and pricing strategies that support margins.
Incremental reductions in fair value estimates, rather than wholesale downgrades, imply that recent adjustments are driven by conservative tweaks to assumptions, not a deterioration in fundamentals.
Valuation remains supported by the view that cash generation and capital discipline can underpin shareholder returns over the medium term.

Bearish Takeaways

Bearish analysts highlight that multiple successive trims to the price target narrow the margin of safety, indicating less room for execution missteps or macro headwinds.
The downward revisions underscore concerns that growth expectations may need to be moderated, particularly if demand trends soften or input costs remain volatile.
There is increased focus on potential risks to operating leverage, with some caution that slower than expected volume recovery could weigh on earnings momentum.
Relative to prior assumptions, the updated valuation frameworks incorporate a more measured outlook for near term expansion, reflecting heightened scrutiny on delivery against guidance.

What's in the News

Verallia Société Anonyme announced that Chief Financial Officer Nathalie Delbreuve will leave the company on 28 November 2025 after five years in the role, prompting an upcoming leadership transition in the finance function (Key Developments).
The Science Based Targets initiative has validated Verallia's Net Zero 2040 trajectory, confirming the robustness of its climate strategy and long term decarbonization roadmap (Key Developments).
Verallia has committed to reduce CO2 emissions from scopes 1 and 2 by 90 percent by 2040 versus 2019 and to offset the remaining 10 percent, making it the first global glass packaging producer for food and beverages to adopt a Net Zero 2040 target (Key Developments).
Between 2019 and 2024, Verallia has already cut scopes 1 and 2 emissions by 24.7 percent, underlining tangible progress toward its validated Net Zero trajectory (Key Developments).

Valuation Changes

Fair Value: Unchanged at approximately €27.07 per share, indicating no revision to the central valuation outcome.
Discount Rate: Risen slightly from about 7.22 percent to 7.24 percent, reflecting a marginally higher required return.
Revenue Growth: Effectively unchanged at around 1.48 percent, suggesting a stable outlook for top line expansion.
Net Profit Margin: Stable at roughly 8.30 percent, with only a negligible downward adjustment in the modelled level of profitability.
Future P/E: Edged up slightly from about 13.29x to 13.30x, implying a marginally higher multiple being applied to forward earnings.

Strategic investments, sustainability initiatives, and product innovation position Verallia for long-term growth, premium pricing, and enhanced profitability in expanding markets.
Operational efficiencies and strong customer relationships support resilience, improved margins, and reliable earnings despite occasional regional volatility.
Weak pricing power, capital intensity, energy cost volatility, and competitive pressures in slow-growth European markets threaten Verallia's margins, growth prospects, and financial flexibility.

Catalysts

About Verallia Société Anonyme

Manufactures and sells glass packaging products for beverages and food products worldwide.What are the underlying business or industry changes driving this perspective?

Recent investments in new furnace capacity in Brazil and Italy are set to capitalize on robust growth in Latin America and the food segment, positioning Verallia to benefit from rising consumption among the emerging middle class and ongoing demographic shifts-both of which should support higher long-term revenue growth.
Ongoing product innovation-such as the launch of lightweight "Air range" bottles and jars, and the My Air single-serve solution-directly addresses changing consumer preferences for premium, convenient, safely packaged products and for sustainable packaging. This strengthens Verallia's ability to capture premium pricing, defend market share, and support both top-line and margin expansion.
Deployment of advanced decarbonization technologies (hybrid and electric furnaces with significant CO2 reduction) and 50% cullet recycling self-sufficiency align with the intensifying regulatory and consumer focus on sustainability, providing Verallia with a structural advantage over less environmentally-friendly competitors. This should reduce future compliance costs, enhance pricing power, and bolster long-term profitability.
Continued ramp-up of operational efficiency programs (PAP program, automation, and SG&A reduction), as evidenced by improved margin flow-through in Q2 and cost productivity above targets, is expected to further optimize cost structure and support sustainable improvements in net margins and free cash flow.
Stable, long-term customer relationships (over 10,000 diversified customers and leading brands) paired with a return to normal capacity utilization in most geographies (except Germany/UK) reinforce resilience and earnings visibility, helping cushion near-term volatility and providing a foundation for steady growth in revenues and earnings.

Verallia Société Anonyme Earnings and Revenue Growth

Verallia Société Anonyme Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Verallia Société Anonyme's revenue will grow by 1.9% annually over the next 3 years.
Analysts assume that profit margins will increase from 5.2% today to 10.1% in 3 years time.
Analysts expect earnings to reach €366.2 million (and earnings per share of €2.69) by about September 2028, up from €179.1 million today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as €279 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 12.3x on those 2028 earnings, down from 15.7x today. This future PE is lower than the current PE for the FR Packaging industry at 14.0x.
Analysts expect the number of shares outstanding to grow by 0.1% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.05%, as per the Simply Wall St company report.

Verallia Société Anonyme Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Persistent negative price/mix impact and ongoing price reductions (evident from negative organic revenue growth and explicitly negative price/mix bridge), indicate Verallia's inability to consistently pass through cost increases or achieve pricing power, which can constrain revenue and depress margins over the long term.
Heavy exposure to slow-growth and volatile European markets, particularly Northern and Eastern Europe (including ongoing underperformance and restructuring in Germany and UK), limits the company's organic growth prospects and creates risks of revenue stagnation or earnings volatility.
High capital intensity and ongoing need for significant CapEx (furnace investments and continual repairs), coupled with cyclical capacity additions in uncertain demand environments, may pressure free cash flow and result in higher leverage, as evidenced by rising net debt and a leverage ratio increase from 2.1x to 2.6x.
Volatility in input and energy costs (notably significant negative spread in H1, and history of energy price spikes), combined with the energy-intensive nature of glass manufacturing, exposes Verallia to regulatory, inflationary, and competitive risks that can erode EBITDA margins and net earnings over time.
Increased industry consolidation and capacity shutdowns in Europe, along with competitive dynamics from low-cost producers and alternative packaging materials, threaten Verallia's market share and pricing, leading to potential declines in profitability and long-term earnings power.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of €31.129 for Verallia Société Anonyme based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of €41.0, and the most bearish reporting a price target of just €28.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €3.6 billion, earnings will come to €366.2 million, and it would be trading on a PE ratio of 12.3x, assuming you use a discount rate of 7.0%.
Given the current share price of €23.9, the analyst price target of €31.13 is 23.2% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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