Analysts stay bullish on Heineken Malaysia despite earnings miss
RHB Investment Bank Bhd (RHB IB) noted that easing input costs and favourable forex movements should provide further uplift, even as macroeconomic headwinds and weak consumer sentiment weigh on consumption in the second half of 2025 (2H25).
"As such, Heineken Malaysia's mitigation strategies are expected to revolve around consumer engagement, innovative product launches and disciplined cost management," it said in a note.
The research house pointed out additional catalysts such as the strong rebound in tourist arrivals ahead of Visit Malaysia 2026 and the continued effective crackdown on contraband trade.
RHB IB lowered its target price to RM30.50 from RM31.30 but reaffirmed its Buy call, saying the brewer's first-half 2025 results fell short of expectations due to softer-than-expected sales.
"We believe the recent stock sell-off is unwarranted and its current valuation is compelling, in view of its resilient earnings and generous dividends, notwithstanding the cautious consumer sentiment and environment of rising costs," it added.
Meanwhile, Hong Leong Investment Bank Bhd (HLIB) has cut its earnings per share forecasts for the financial years 2025, 2026, and 2027 by 5 per cent, 4 per cent, and 4 per cent, respectively, citing the recent earnings shortfall.
It added that following Heineken's 2 to 8 per cent beer price hike, some frontloading of volumes is expected in the next quarter, consistent with past trends.
"While the financial impact of past price increases on brewers has generally been neutral rather than negative, supported by relatively inelastic demand, Heineken Malaysia's ongoing spending in digital infrastructure could weigh on its near-term profitability.
The research house, which expects related costs to persist beyond 2H25, cut its target price sharply to RM27.14 from RM35.56.
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