'Baby gloom', BofA flags China's dropping birthrate woes for Danone

BofA Global Research flags China's "baby gloom" fears for Danone DANO.PA over shrinking infant milk formula (IMF) market as the country's birthrate dived 17% y/y

Danone has its "single most important business unit" in terms of profitability in China, BofA flags, and the declining population can lead the IMF market to shrink by around 6% annually between 2026 and 2028

Shares in Danone slump around 6%, paring earlier losses of about 11%, to their lowest since July, shedding roughly 3 billion euros ($3.51 billion) from the food maker's market cap

Despite Danone's "defying gravity" with market share gains, BofA questions if this momentum can last as outperformance is expected to slow from 2027

The slowdown could threaten margin growth, it adds, and reiterates "underperform" rating

If the losses persist, the stock will see its biggest single-day slump since mid-March 2020

($1 = 0.8540 euros)