Lindt Earnings: In-Line EBIT and Further Price Hikes Expected Due to High Cocoa Prices

Wide-moat Lindt&Spruengli delivered strong 2023 results with EBIT of CHF 813 million—9% ahead of the prior year, further margin improvement to 15.6% from 15%, and EPS of CHF 2,900, which are broadly aligned with our estimates. Most of the profitability improvement is attributable to price increases to compensate for rising raw materials costs, especially the price of cocoa, which almost doubled over 2023 and reached a historic high at the end of the year. Despite the global market slowdown, all regions contributed to top-line and profit growth and volume/mix remained positive. We maintain our fair value estimate of CHF 94,000. At current levels, shares look overvalued.