Pernod Ricard: Oddo optimistic and upgrades to 'buy'
(CercleFinance.com) - An analyst at Oddo BHF this morning upgraded his rating on the Pernod Ricard share, from "neutral" to "buy," ahead of the publication of quarterly results on 18 April - which the broker nevertheless expects to "slow down".
Alongside this upgrade, the analyst has raised his target price for the share - from 170 euros to 180 euros.
Oddo BHF believes that, despite the anticipated slowdown in Q3, the group has the ability to outperform its guidance - particularly thanks to the strong profitability of its US subsidiary. The group is expected to announce a string of good news over the next 18 months. Given expected improvements in its operating performance and returns to shareholders in general, the share is expected to trade at a premium of 10% to 15% relative to its main competitor, Diageo, the broker writes.
It adds that FY sales are expected to grow by nearly 6% (consensus +5.7% vs. +6.0% in 2017/18), even after the slowdown in Q3, The group therefore remains at the top end of its long-term guidance range (+4%-7%) and is approaching the performances of its competitors Diageo, Rémy-Cointreau and Campari. However, to date it has lacks operating leverage relative to its peers.
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
Alongside this upgrade, the analyst has raised his target price for the share - from 170 euros to 180 euros.
Oddo BHF believes that, despite the anticipated slowdown in Q3, the group has the ability to outperform its guidance - particularly thanks to the strong profitability of its US subsidiary. The group is expected to announce a string of good news over the next 18 months. Given expected improvements in its operating performance and returns to shareholders in general, the share is expected to trade at a premium of 10% to 15% relative to its main competitor, Diageo, the broker writes.
It adds that FY sales are expected to grow by nearly 6% (consensus +5.7% vs. +6.0% in 2017/18), even after the slowdown in Q3, The group therefore remains at the top end of its long-term guidance range (+4%-7%) and is approaching the performances of its competitors Diageo, Rémy-Cointreau and Campari. However, to date it has lacks operating leverage relative to its peers.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.