Goldman Sachs initiated coverage of Kerry Group with a "buy" rating, citing favorable valuation and strategic positioning. The firm set a 12-month price target of €95, implying a 29.3% upside from the initiation price of €73.45. This positive outlook follows Kerry's portfolio transformation, including exiting its consumer foods business.

This move comes after Kerry's divestiture of Dairy Ireland in December 2024, a business that represented 13% of group sales. The shift positions Kerry as a pure-play ingredients supplier focused on taste, nutrition, and functional solutions. Goldman Sachs noted the company's 2024 sales were €6.93 billion, with an EBITDA margin of 17.1%.

The brokerage pointed out that over 90% of Kerry's portfolio is now in higher-margin ingredients, following numerous acquisitions and divestitures. Future acquisitions are expected to be focused on technology bolt-ons. Kerry is currently trading at 14x estimated 2026 earnings, a discount to its peers.

Analysts see potential in volume recovery as a key driver for growth. Kerry's diverse customer base and significant exposure to the food service channel, at 32% of revenue, also supports the positive outlook. Investors will be watching how Kerry's new strategy plays out in a challenging economic environment.