PERNOD RICARD : Stifel confirms its recommendation on the stock
February 16, 2024 at 10:17 am EST
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Stifel maintains its 'Hold' rating on Pernod Ricard shares, with an unchanged target price of 170 euros.
Pernod Ricard reported a -3.5% organic decline in sales in Q2 of fiscal 2024 (the period corresponding to Q4 of calendar 2023), broadly in line with the consensus estimate of -3.3%.
The consensus is for organic sales growth of +2% in 2024, with positive developments in the USA and India, but is more cautious about China.
Finally, the medium-term outlook (FY23-25) is confirmed, with Pernod Ricard still targeting organic sales growth of between +4% and +7%, and an organic operating margin expansion of +50 to +60 bp.
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Pernod Ricard is the world's No. 2 in the production and marketing of Premium and Prestige spirits and wines. Net sales break down by family of products as follows:
- spirits and champagnes of strategic international brands (63.4%): Absolut (12.7 million cases sold in 2022/23), Jameson (10.7 million), Ballantine's (8.8 million), Chivas Regal (5.1 million), Malibu (4.7 million), Ricard (4.4 million), Havana Club (4.3 million), Beefeater (3.7 million), Martell (2.4 million), The Glenlivet (1.6 million), Mumm (0.6 million), Royal Salute (0.3 million) and Perrier-Jouët (0.3 million);
- local strategic brands' spirits (17.7%): Seagram's, Kahlua, Olmeca, Seagram's Gin, Ramazzotti, Imperial, Pastis 51 and Clan Campbell brands, etc.;
- speciality brand's craft spirits (6.2%): Italicus, Lillet, Pernod, Suze, Augier, Malfy, Jefferson's, Powers and Redbreast brands, etc.;
- strategic wines (3.9%): Jacob's Creek, Kenwood, Brancott Estate, Campo Viejo, Church Road, George, St Hugo, Stoneleigh, Ysios and Wyndham brands;
- other (8.8%).
At the end of June 2023, the group has 96 production sites worldwide.
Net sales are distributed geographically as follows: Europe (28.5%), Americas (28.7%) and other (42.8%).