Morgan Stanley Lowers HelloFresh Rating Amid Growing Competition in Ready-to-Eat Market

09:59 AM EST, 12/09/2025 (MT Newswires) -- Morgan Stanley revised its rating and price target for HelloFresh (HFG.F), mainly driven by intensifying competition in the ready-to-eat and meal kits market, particularly in the US, and increased uncertainty over the company's long-term growth. The rating on the German meal kit company's stock was downgraded to underweight from equal weight on Tuesday, while the price target was trimmed to 5.50 euros from 8.30 euros. "We think HelloFresh will need to invest more EBITDA and, ultimately, FCF to stabilise RTE performance in 2026," the research firm said. "We would wait to see a stabilisation in meal kits, where revenues are currently declining in high-single-digits % YoY, and a stabilisation in RTE revenues before turning more positive. Further clarity on where the long-term margin stabilises in both segments could also remove uncertainty and be a source of upside risk." The estimated 2026 and 2027 ready-to-eat margins for the group were respectively nudged down by 1 percentage point to 2% and 3%, while the adjusted EBITDA projections were cut by 3% for 2025, 6% for 2026 and 7% for 2027. Analysts also view the company's risk-reward profile as skewed downwards without any catalysts in the near term, with its read-to-eat business potentially missing fourth-quarter forecasts.