Pernod Ricard: Credit Suisse hails growth

(CercleFinance.com) - Credit Suisse hails Pernod Ricard's full-year results, confirming its buy rating ("outperform") on the stock (even though it has trimmed its target price from 156 euros to 153 euros).

This represents upside potential of just over 10%.

The French spirits group provides one of the best organic growths in the consumer goods sector in Europe, the broker's report hails, which has raised its organic growth forecast for 2018/19 from 5.5% to 5.8%.

However, due to the "temporary" increase in costs in cognac production, Credit Suisse has reduced its organic growth forecast for 2018/19 operating profit from 7.9% to 7.3%, which explains why it has reduced its target price for the share.

That said, Credit Suisse applauds the quality of Pernod Ricard's growth, driven by China, as well as the return to growth in the US for the first time in years. Even the group's "pricing power," the fruit of restructuring carried out over recent years, and the commitment of the company boss, Alexandre Ricard, “remaining disciplined" in the "hunt for deals.”



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