Pernod-Ricard: Credit Suisse raises target price
(CercleFinance.com) - Credit Suisse's organic growth estimates remain unchanged.
However, the broker has reduced its EPS estimates for fiscal years 2022 and 2023 by 6% to reflect recent FX movements.
Credit Suisse confirms its buy rating on the share, raising its corresponding target price to 165 euros (vs. 157 euros - current price: 150 euros, +3.5%).
"Encouraging category and share trends: Underlying trends across Pernod's key markets are encouraging, noting: i) the US Spirits market remains solid, growing double-digit across the NABCA states in June/July; ii) Depletions back to growth in China; iii) Share gains in India, although the business is not yet back at pre-COVID-19 levels in part due to supply constraints; and iv) Share gains across Europe, including France, the UK and Germany," Crédit Suisse says.
"Pernod trades on calendarised FY22E 21x P/E and 24x EV/NOPAT, a c5% premium to Diageo, which we believe is warranted given its better share trends across developed markets, and higher exposure to Asia, which is recovering quicker than other emerging markets," the analyst adds.
Copyright (c) 2020 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.
However, the broker has reduced its EPS estimates for fiscal years 2022 and 2023 by 6% to reflect recent FX movements.
Credit Suisse confirms its buy rating on the share, raising its corresponding target price to 165 euros (vs. 157 euros - current price: 150 euros, +3.5%).
"Encouraging category and share trends: Underlying trends across Pernod's key markets are encouraging, noting: i) the US Spirits market remains solid, growing double-digit across the NABCA states in June/July; ii) Depletions back to growth in China; iii) Share gains in India, although the business is not yet back at pre-COVID-19 levels in part due to supply constraints; and iv) Share gains across Europe, including France, the UK and Germany," Crédit Suisse says.
"Pernod trades on calendarised FY22E 21x P/E and 24x EV/NOPAT, a c5% premium to Diageo, which we believe is warranted given its better share trends across developed markets, and higher exposure to Asia, which is recovering quicker than other emerging markets," the analyst adds.
Copyright (c) 2020 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.