Market reaction
Shares of HelloFresh SE (ETR:HFGG) slid sharply on Friday after Barclays moved the meal-kit company from an "equal weight" to an "underweight" rating. The stock fell 5.71% to 23.14, while the DAX finished about 6% higher, leaving HelloFresh well behind the broader German index.
Why Barclays downgraded
Barclays pointed to several operational concerns that have persisted for some time but said recent developments have heightened the risk to HelloFresh's revenue outlook. The broker highlighted weaker marketing returns and softer recent sales dynamics as key factors behind its decision.
The bank noted comments indicating second-quarter weakness, which it interprets as a deterioration in the return on marketing spend. Its own tracking suggested that revenue trends remained weak through June and July.
Data signals from Barclaycard
Barclays' analysis referenced U.S. Barclaycard transaction data. That dataset suggested meal-kit sales fell 6% year-on-year in July, an improvement from a 9% decline in June but still below the roughly flat growth seen in April and May. Ready-to-eat product sales performed worse, with declines accelerating to 18% year-on-year in July from 15% in June and 12% in May. Barclays stressed that its data are directional and U.S.-only, and it estimates the U.S. accounts for about 60% of HelloFresh's group revenue.
Guidance and the path to meeting it
HelloFresh has given full-year revenue guidance implying a decline of 3% to 6% at constant exchange rates. Barclays calculated that, with roughly an 8% revenue drop in the first half, achieving that guidance would require a second-half revenue decline in the order of 4% to 5%.
To meet that path, the broker said HelloFresh would need a meaningful improvement in meal-kit customer acquisition during the second half of August and in September. Without such an improvement, Barclays warned the company may struggle to reach the stated full-year revenue range.
Quarterly and multi-year forecasts
Barclays expects third-quarter revenue to decline 7% at constant exchange rates and sees fourth-quarter revenue down 5% at constant exchange rates. The broker projects adjusted EBITDA of about 2375 million for 2026, noting this sits at the low end of HelloFresh's own guidance range.
For 2027, Barclays lowered its revenue growth forecast to -4% at constant exchange rates, versus company consensus for flat growth. Its 2027 adjusted EBITDA estimate of 2378 million is roughly 5% below the consensus figure of 2397 million.
Valuation and price target
Following its updated view, Barclays reduced its price target to 23.10 from 24.40. The bank said the new target implies about 7% to 10% downside depending on the reference price and argued that, relative to other coverage names, HelloFresh lacks compelling free-cash-flow support.
Implications
The downgrade reflects a combination of weak recent sales momentum, pressure on marketing effectiveness, and doubts about the sustainability of free cash flow generation. Barclays' updated near-term and medium-term forecasts lower investor expectations for revenue and adjusted EBITDA, and the cut in price target signals diminished upside relative to the stock's recent trading level.
Conclusion
Investors in HelloFresh now face a narrower path to meeting company guidance, according to Barclays, with the broker expecting further revenue declines across the coming quarters and trimmed profitability forecasts. The market reaction on Friday underscored the sensitivity of the stock to both operational trends and analyst views about cash flow and marketing efficiency.