Goldman Sachs has opened coverage of Kerry Group PLC (ISE:KYG) (OTC:KRYAY) with a Buy recommendation and assigned a price target of EUR95.00, which the investment bank says implies about 30% upside from prevailing market levels. The stock is trading at $87.79, close to its 52-week low of $84.45, and InvestingPro data signals the company appears undervalued against its Fair Value assessment.
The bank frames Kerry as a pure-play ingredients supplier and an innovation partner to the global Food & Beverage sector. In its initiation note, Goldman Sachs points to a current multiple of 14x 2026E price-to-earnings, a reading it describes as at the 1st percentile relative to the last 10 years and roughly a 35% discount to ingredient peers.
Goldman Sachs projects adjusted EPS for Kerry to grow at a 9% compound annual growth rate from FY26 to FY29E. That trajectory is expected to be supported by mid-single-digit volume growth concentrated in food service and emerging markets, alongside reformulation tailwinds that favor ingredient suppliers.
The bank highlights Kerry’s exposure to the food service channel, which it estimates represents 32% of group sales. Goldman Sachs argues that this channel mix is supportive of both sales mix and margin profile and that the Asia Pacific, Middle East and Africa region will serve as the primary engine for future growth.
On the margin outlook, Goldman Sachs anticipates EBITDA margin expansion from 17.1% to 19.3% by 2028. The firm attributes the improvement to several factors it detailed: savings from the Accelerate 2.0 program sized at EUR100 million, a mix shift toward higher-margin ingredients, operating leverage as volumes grow, and normalization of utilization in China.
Key takeaways
- Goldman Sachs initiates coverage with a Buy rating and a EUR95.00 price target, implying ~30% upside.
- Valuation sits at 14x 2026E P/E, at the 1st percentile over the past decade and roughly 35% below ingredient peers.
- Forecasts include a 9% adjusted EPS CAGR (FY26-29E) and EBITDA margin expansion to 19.3% by 2028 driven by EUR100m in Accelerate 2.0 efficiencies and mix improvement.
Context and implications
Goldman Sachs’ initiation frames Kerry as a growth-and-margin story tied to food service demand, geographic expansion in APAC, Middle East and Africa, and execution on cost and utilization improvements. The projections rely on volume recovery and operational gains that the bank identifies as the primary levers for earnings and margin upside.
Risks and uncertainties
- Valuation could remain compressed despite the initiation: the stock is trading near its 52-week low and currently sits at historically low P/E percentiles.
- Execution risk on the Accelerate 2.0 program: the forecasted EUR100 million of efficiencies is a driver of the margin expansion outlook.
- Operational and demand risks tied to China and the broader APAC region, where normalization of utilization is expected to contribute to margin recovery.