Goldman Sachs downgraded Ahold Delhaize (ticker AD) from “Buy” to “Neutral” and reduced its 12‑month price target from €45 to €40.
The downgrade is driven by a weaker U.S. revenue outlook linked to a high‑single‑digit decline in national SNAP (Supplemental Nutrition Assistance Program) participation following the One Big Beautiful Bill Act (OBBBA) reforms.
Ahold Delhaize’s U.S. operations generate approximately 5‑6 % of total revenue from SNAP‑related spending; Goldman expects a revenue headwind of about 25 basis points per year in 2027 and 2028.
Forecast for U.S. like‑for‑like sales (excluding fuel) for 2027‑28 has been lowered to 1.75 % from the prior 2.75 %.
SNAP benefit coverage is projected to fall further due to expanded work requirements and tighter eligibility, with economists anticipating a high‑single‑digit decline in SNAP benefits this year.
The broker notes exposure to several states experiencing the steepest SNAP reductions, and overall U.S. grocery retail sales and food‑at‑home consumption have slowed since the start of the year, weakening volume and mix trends.
Despite a narrowed performance gap versus peers and improvements at the Stop & Shop banner, these gains are insufficient to offset broader volume pressures.
Diluted earnings‑per‑share (EPS) forecasts have been trimmed by 1 % for 2027 (to €2.94) and 1.8 % for 2028 (to €3.12).
Projected group revenue for 2027 is €94.61 bn (down from €95.15 bn) and for 2028 €96.59 bn (down from €97.87 bn).
For 2026, Goldman forecasts revenue of €92.59 bn, underlying EBIT of €3.75 bn and basic EPS of €2.78; for 2027, revenue growth of 2.2 %, EBIT €3.83 bn and basic EPS €2.95.
A lower terminal growth rate of 2 % (versus 2.5 %) reduces the valuation underpinning the price target.
