How Strong China Sales and 2025 Outlook at Danone (ENXTPA:BN) Are Shaping Its Investment Story

• Danone reported third-quarter 2025 sales of €6.88 billion, surpassing expectations as robust growth in China’s infant milk formula and medical nutrition offset weaker demand in North America.
• The company reconfirmed its full-year 2025 outlook, highlighting China's contribution as an increasingly critical driver amid concerns about regional diversification and evolving consumer preferences.
• We’ll explore how China’s exceptional performance and Danone’s renewed guidance may influence the company’s investment narrative going forward.

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Danone Investment Narrative Recap

To be a Danone shareholder right now, you have to believe that its pivot toward growth in specialized nutrition and emerging markets, especially China, can counterbalance ongoing weakness in core, mature Western markets. The recent Q3 sales beat, led by China, underscores this short-term catalyst; however, exposure to shifts in Chinese demand and regional concentration remains the biggest risk. The latest results don't materially change that risk/reward trade-off, but highlight the urgency of regional diversification.

Of all recent announcements, Danone's confirmed 2025 guidance is most relevant, signaling management’s confidence in delivering 3% to 5% like-for-like sales growth with operating income outpacing sales. This outlook ties directly into the current growth catalyst: expanding high-margin nutrition segments while managing headwinds in traditional dairy and plant-based categories. Ultimately, this forward guidance reinforces the central investment thesis but doesn't fully address the sustainability of China's performance.

Yet, investors should be aware that despite robust Chinese growth, there are mounting concerns about Danone’s regional reliance and the implications if...

Read the full narrative on Danone (it's free!)

Danone's outlook suggests revenue of €29.9 billion and earnings of €2.7 billion by 2028. This is based on an assumed annual revenue growth rate of 3.0% and represents a €0.9 billion increase in earnings from the current €1.8 billion.

Uncover how Danone's forecasts yield a €76.88 fair value, in line with its current price.

Exploring Other Perspectives

Five fair value estimates from the Simply Wall St Community for Danone range widely from €42.30 to €114.27 per share. While China's high-margin segment drives optimism, you should consider how concentrated regional growth can affect long-term stability and weigh multiple views before making decisions.

Explore 5 other fair value estimates on Danone - why the stock might be worth 45% less than the current price!

Build Your Own Danone Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Danone research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Danone research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Danone's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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