Pernod Ricard: A favourable 2018/19 outlook despite the disappointing EBIT guidance
Pernod Ricard: (BUY, Fair Value EUR154 vs. EUR156 (+11%))A favourable 2018/19 outlook despite the disappointing EBIT guidance
Despite the guidance, the outlook for 2018/19 remains favourable. We expect another year of strong growth (+6.2% in organic terms) mainly driven by China and India (up double digit). The operating leverage should improve, even though this should be at a lower extent than what we and the market had anticipated. We cut our FY 19 EPS estimate by 2% as we take into account 1/ the EBIT guidance and 2/ the new tax rate (26% vs 25% in FY18). Our Fair Value is adjusted to EUR154. Buy recommendation maintained.
Pernod Ricard produces and distributes wines and spirits. Co. produces aniseed products, vodka, whisky, cognac, rum, gin, liqueurs, champagnes and wines. Co.'s activity is organized around families of products built around brands. Its brands portfolio includes: ABSOLUT vodka, Ricard pastis, Ballantine's, Chivas Regal and The Glenlivet Scotch whiskies, Jameson Irish whiskey, Martell cognac, Havana Club rum, Beefeater gin, Kahlua and Malibu liqueurs, Mumm and Perrier-Jouet champagnes as well as Jacob's Creek and Brancott Estate wines. Co. is structured into four segments constituted by the following geographic regions: France, Europe (excluding France), Americas, Asia/Rest of the World.
Since 1996, Bryan, Garnier & Co has been growing with an absolute conviction that the investment banking landscape would experience a major revolution: most of the large local generalist banking groups will disappear to the benefit of a handful of global powerhouses, and an emerging group of independent, highly specialised boutique investment banks.
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