De’Longhi S.p.A. ($DLG): Riding the Coffee Super-Cycle
Coffee-led appliance leader with rising margins, strong FCF and a clean balance sheet.
De’Longhi S.p.A. ($DLG, Milan) is a global leader in coffee machines and premium small appliances, with brands spanning De’Longhi, Braun and Kenwood. The stock has just broken to new highs after another “beat-and-raise” quarter and upgraded 2025 guidance, with Q3 revenues up and adjusted EBITDA margin at 17.0%.
Fundamentally, the story is a clean one: mid-teens revenue growth, expanding margins, strong free cash generation, and a still net-cash balance sheet. Technically, $DLG is late in a larger 5 Wave advance, with upside extension targets in the high $30s / low $40s, but short-term overbought signals argue for patience and a pullback buy rather than chasing the breakout.
$DLG is a quality coffee/consumer appliance compounder with strong fundamentals.
Key Takeaways
$DLG is the global leader in domestic coffee machines with growing exposure to professional coffee via La Marzocco and Eversys, riding a structural espresso premiumisation trend.
Fundamentals are strong: 2024 revenues grew 13.7% to ~$3.5B, adjusted EBITDA margin expanded to 16%, and free cash flow reached ~$416M with ~74% cash conversion.
9M 2025 results show another step up: revenues +10.4%, adjusted EBITDA margin 15.8%, Q3 margin 17.0%, and guidance raised to 7.5–8.5% revenue growth with EBITDA of $610–620M.
Balance sheet remains conservative: net financial position of ~$309M, total debt/total capital ~10%, and TTM free cash flow yield around 6–8% versus a ~$5.2B market cap.
Valuation is “quality at a reasonable premium”: forward P/E ~15.0x and EV/EBITDA ~9.2x vs peer medians of ~10.7x and ~8.2x, with much lower leverage but also a lower dividend yield.
Company Overview
De’Longhi designs, manufactures and markets small domestic appliances globally, with a heavy tilt toward coffee and food preparation. Core product clusters:
Coffee machines: Bean-to-cup, pump and capsule machines for home, plus professional machines following the La Marzocco acquisition, now the largest profit driver (coffee is ~60% of turnover).
Kitchen & food preparation: Kenwood kitchen machines, Braun blenders and other food prep appliances provide stable, brand-driven volume.
Comfort & air treatment: Heaters, air conditioners, air purifiers, dehumidifiers and other comfort products add seasonal and cyclical exposure.
Geographically, $DLG operates across Europe, APA (Asia-Pacific & Americas) and MEIA (Middle East, India, Africa), each responsible for full-stack brand P&L in their markets. The strategy has been consistent: lean into coffee where the brand is strongest, upscale the mix (premium and professional), and use bolt-on acquisitions to deepen the ecosystem.
Strategically, De’Longhi is best viewed as a coffee-led, brand-driven appliance platform with genuine pricing power and a growing professional coffee arm.
Recent News
The latest 9M and Q3 update matters more than the headline suggests:
Revenue acceleration: 9M 2025 revenue hit €2.461B, +10.4% reported and +11.7% at constant FX.
Segment momentum: household division delivered €2.121B in the first nine months, with strong coffee growth; professional revenue reached €343.5M, up nearly 49% YoY, driven by La Marzocco and Eversys.
Geographic breadth: Europe grew ~9–10% at constant FX, Americas ~11%, Asia-Pacific ~19%, and MEIA ~18%, with especially strong traction in Asia and MEIA.
Profitability: 9M net industrial margin improved to 52.8% of sales, adjusted EBITDA rose to €389.5M, and EBIT to €273.2M.
Guidance raised: management now expects revenue growth of 7.5–8.5% for the year and adjusted EBITDA of €610–620M, citing strength in both divisions despite macro and FX headwinds.
Strategic focus: The company continues to emphasize premium and professional coffee, supported by global marketing (including the “Perfetto” campaign) and integration of La Marzocco, which boosts both mix and margins.
The news is bullish: higher growth, higher margins, and raised guidance.
Fundamental Analysis
De’Longhi has pivoted into a clean growth phase: 2024 revenues grew 13.7% to ~$3.50B, and 9M 2025 revenues are up another 10.4% YoY with Q3 at +8.9%. Coffee remains the engine, supported by brand quality strength and the expansion of the professional division.
Margins are trending up: adjusted EBITDA margin improved from 14.4% (2023) to 16% (2024), with 9M 2025 at 15.8% and Q3 at 17.0%. EBIT margins are expanding alongside, with operating leverage and cost tailwinds (manufacturing, mix) offsetting higher media and labour.
Cash-flow snapshot shows operating cash flow around $432M and free cash flow of ~$329M, after modest capex and some working-capital noise. Combined with FY 2024 free cash flow of ~$416M, this implies a 6 to 8% FCF yield on the current ~$5.3B market cap.
Key points:
FCF conversion is strong: 2024 free cash flow represented ~74% of net income.
TTM data show volatile quarterly FCF (negative in some Qs, very strong in others), but the trend is structurally positive and consistent with the guidance upgrade.
Cash-flow quality is high, with a pattern of lumpy but robust FCF that comfortably funds dividends, M&A and still leaves the balance sheet in net cash.
From the latest balance sheet snapshot:
Cash and equivalents are roughly $626M vs total debt of ~$583M, so the group is essentially net cash on a gross basis.
Total debt/total capital sits near 10%, materially below peer medians (~33%).
Working capital is positive (~$861M), and net tangible assets are >$660M, indicating no over-levered balance sheet hiding behind intangibles.
External filings confirm a positive net financial position of ~$643M at FY 2024 and ~$309M as of the latest 9M 2025 release.
Balance sheet risk is low. Management has real optionality for further M&A, buybacks or accelerated capex if the cycle stays supportive.
Valuation vs peers
Headline multiples
P/E (LTM): ~16.0x vs peer median ~17.6x (slight discount).
P/E (Fwd): ~15.0x vs peer median ~10.7x (premium for growth/quality).
EV/EBITDA: ~9.16x vs peer median ~9.9x.
Price / Sales (LTM): ~1.40x vs peer median ~1.0x.
Price / Book: ~2.49x vs peer median ~2.05x.
Income to shareholders:
Dividend yield ~2.4% vs peer median ~4.6%, reflecting a tilt toward reinvestment and growth rather than pure income.
Risk side: leverage is structurally lower (debt/capital ~10% vs ~33%).
$DLG is not cheap, but it is not over-priced either on most metrics, relative to its growth, margins and net-cash balance sheet. It screens as quality at a sensible premium, not a value play.
Fundamental conclusion
Fundamentals back the bull case: double-digit revenue growth, rising mid-teens margins, strong FCF and low leverage justify a modest valuation premium. The fair-value gap (~7–8% plus 2–3% dividend) isn’t huge on its own, so the real upside comes from execution vs upgraded guidance and multiple expansion if the coffee growth narrative continues to compound.
Technical Analysis
Weekly chart
Price has broken to new multi-year highs, cleanly above the 20/50/100/200-week EMAs, all sloping upward.
Weekly MACD has turned decisively positive with a bullish signal line cross; histogram is expanding.
Weekly RSI sits around 64–65, trending higher but not yet in extreme overbought territory.
Elliott Wave count from 2022 lows shows a completed or nearly completed Wave 5, with price already hitting the 1.413 extension around $35.2 and a higher extension target near $37.1 (1.618).
Downside retracement levels for the entire advance cluster around ~$30.3 (0.382), ~$28.8 (0.5) and ~$27.2 (0.618), aligning with prior consolidation and breakout zones.
Weekly bias: Bullish but late-cycle. There is room for an overshoot toward $37–38, but the risk of a multi-week ABC correction after this wave completes is elevated.
Daily chart
Daily price action shows a strong breakout from a ~$29–31 range, followed by a vertical spike to ~$35 post-earnings, and now a short consolidation near the highs.
EMAs (20/50/100/200-day) are stacked bullishly (~$32.7 / $31.5 / $30.5 / $29.7) and acting as dynamic support.
MACD on the daily has a bullish cross and positive histogram, although momentum is decelerating.
Daily RSI slightly spiked above 70 around earnings, but now sits at 67 (stretched but not yet signaling climax exhaust).
Elliott Wave daily shows Wave 5 complete at recent high, with projected ABC retracement levels at roughly $30.3 (0.382), $28.8 (0.5) and $27.2 (0.618). This aligns with weekly Fib levels and prior structural pivots.
Daily bias: Still bullish, but risk/reward for fresh entries at $35 is poor. Base case is a choppy pullback into the high-$20s / low-$30s over the next 4-8 weeks before the next trend leg.
Technical conclusion
Technically, $DLG is in a strong uptrend on weekly and daily timeframes, but the fibs and momentum readings argue that we’re late in a Wave 5 push rather than early. High-probability support sits first at $34–34.5, then much stronger at $30–29. Upside extension targets reside in the $37–41 range. For a medium-term swing, the trade is to buy a controlled pullback, not to chase the first break above $35.
Trade Plan (Medium-Term, 3–9 months)
Position bias: Long $DLG on pullbacks.
Core thesis: Structural coffee growth + brand strength and professional expansion drive mid-teens growth and rising margins. Balance sheet and FCF de-risk the story, while technicals point to a late-stage but still incomplete uptrend with upside extension toward the high-$30s / low-$40s.
Primary entry :
Buy a pullback into $34.0–34.5
This zone aligns with 0.382–0.5 intraday retracements, 20–50 EMA support on lower timeframes, and the first pivot support after the recent spike.
Secondary entry if correction develops: add in the $30.5–31.0 range.
Stops / invalidation
For the $34–34.5 tranche, anchor risk to a close below $32 (decisive break of the intraday support and short-term EMA stack).
For a blended position (if also filled at $30–31), hard stop on a weekly close below ~$27.0
Targets
Target 1: $37.0–37.5
Target 2 (aggressive): $40.5–41.0
If momentum is still strong into $37, you can de-risk half the position and run the remainder toward the second target with a stop trailed just below rising daily EMAs.
The cleaner trade is a staged long from the mid-$30s into the low-$30s, with structural stops below $27 and upside targets in the high-$30s/low-$40s. A high-quality name with a high-quality risk/return profile if you let the pullback come to you.
Conclusion
$DLG is exactly the kind of mid-cap compounder institutions like to own: global category leadership in a structurally growing niche (espresso and premium coffee), expanding margins, robust FCF, and a net-cash balance sheet underpinning active capital allocation. The valuation embeds a quality premium but not a bubble. Mid-teens earnings multiples for a business growing high single to low double digits with a rising EBITDA margin and an upgraded 2025 guide. On the tape, the stock is in a powerful uptrend yet late in a Wave 5 leg, with clear extension targets above and equally clear retracement supports below. The institutional play is to accumulate on controlled weakness into $34–34.5 and, ideally, $30–31, and ride the next leg of the coffee cycle toward $37–41 while the guidance upgrade and FCF story do the heavy lifting.
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Tags: De’Longhi, DLG, DLG stock, De’Longhi stock, coffee stocks, appliance stocks, European stocks, mid cap stocks, growth stocks, consumer discretionary, stock market analysis, technical analysis, Elliott Wave, breakout stocks, undervalued stocks, premium brands, long ideas, investing
The 17% EBITDA margin in Q3 is really impressive given the macro headwins. What stands out is how they're pulling that off while still investing in the professional coffee segment with La Marzocco. The net cash position gives them so much flexibilty for M&A if another opportunity like that emerges.