Goldman Sachs has moved Ahold Delhaize's rating down one notch to "neutral" from "buy" and reduced its 12-month price target to €40, versus a prior target of €45. The brokerage said its decision reflected a dimmer revenue outlook in the U.S., tied primarily to reduced SNAP participation and weakening grocery volume and mix trends.
Goldman notes the stock offered roughly 10.6% upside from a €36.17 share price at the time of the note, versus an average sector upside of about 17%, a gap that helped precipitate the change in recommendation.
Policy changes and SNAP exposure
The bank highlighted the effects of the One Big Beautiful Bill Act (OBBBA), saying the legislation's changes have already been associated with a high-single-digit decline in national SNAP participation. Goldman estimated Ahold Delhaize's U.S. operations receive about 5% to 6% of their revenue from SNAP-related spending and quantified the impact as an approximate 25 basis-point headwind to group revenue per year in both 2027 and 2028.
Goldman also lowered its assumptions for U.S. like-for-like sales excluding fuel for 2027 and 2028 to 1.75% from a prior 2.75%, reflecting the weaker demand backdrop tied to lower program participation and softer in-store volumes.
The brokerage added that participation could weaken further as additional measures, such as state administrative cost-sharing and potential benefit cost-sharing, come into effect. It observed that SNAP benefit coverage has fallen across the country amid expanded work requirements and tighter eligibility rules, and its economists expect a high-single-digit decline in SNAP benefits in the current year.
Geographic concentration and volume trends
Goldman pointed out that Ahold Delhaize has exposure to several states that are experiencing some of the steepest declines in SNAP benefits and participation. At the same time, the bank said broader U.S. grocery retail sales and food-at-home consumption data have slowed since the start of the year, with both volume and mix trends softening.
While the company has narrowed its performance gap relative to some peers - with noted improvement at Stop & Shop - Goldman concluded those operational gains are not sufficient to offset the broader pressures weighing on grocery volumes.
Updated financial forecasts
Reflecting the revised outlook, Goldman trimmed its diluted earnings-per-share forecasts by 1% for 2027 and by 1.8% for 2028 to €2.94 and €3.12, respectively. The bank also lowered projected group revenue for 2027 to €94.61 billion from €95.15 billion, and for 2028 to €96.59 billion from €97.87 billion.
Goldman set out its near-term projections as follows: for 2026, revenue of €92.59 billion, underlying EBIT of €3.75 billion and basic EPS of €2.78. For 2027, it forecast revenue growth of 2.2%, underlying EBIT of €3.83 billion and basic EPS of €2.95.
Finally, Goldman said its revised assumptions, together with a lower terminal growth rate of 2.0% (down from 2.5%), reduced the valuation support for the price target, prompting the cut to €40.
Implications
The combination of policy-driven reductions in SNAP participation and a slower grocery market has led Goldman Sachs to moderate both its sales and earnings outlook for Ahold Delhaize, narrowing the margin between the stock's expected upside and that of the sector. The firm reflected these changes through lower revenue and EPS forecasts, as well as a reduced terminal growth rate that underpins the new price target.