Pernod Ricard Share Target Slashed
Wednesday 3rd July, Deutsche Bank gave the Pernod Ricard Share Target price a slash from from EUR129.00 to EUR127.00. The revision reflects the bank’s outlook on the company’s future performance amidst market challenges.
The bank’s analyst pointed out that it is probable that the company will signal that its organic sales growth for FY25 may not align with its medium-term goal of 4-7%.
Deutsche Bank’s own estimate stands at 2.1%, with the Bloomberg consensus at 5.3%. This adjustment comes in light of persistent difficulties and excess inventory issues in key markets such as the United States and China.
China has become a bit of a farce market for Pernod Ricard over the last few years. Their attempt to create an elite, VIP club, to essentially milk the top 1% of Chinese society, quickly blew up in their face when casks sales for their Chinese distillery, The Chuan, were undermined when the first bottling from The Chuan was actually made with imported Scotch. Staff members from The Chuan were actually recorded on video talking about this (the video was originally released on YouTube and LinkedIn before Pernod Ricard’s lawyers got it taken down)
This left the elite VIP customers of Pernod Ricard China, wondering what was wrong with the new make spirit from The Chuan if it had to be smothered with imported Scotch to make it good enough to bottle. Needless to say, they aren’t buying any more casks from The Chuan.
As for retail on the product. Within weeks of its release at an RRP of ¥888 (US$122), distributors were dumping it at less than half the retail price, with some distributors throwing it out of their warehouse door for as little as ¥400 (US$55) per bottle.
The revised price target by Deutsche Bank suggests a lack of confidence in Pernod Ricard’s growth prospects. Investors often rely on such assessments to make informed decisions regarding their holdings in the company’s stock.
The Pernod Ricard Share Target slash from Deutsche Bank provides an insight into the anticipated trajectory of Pernod Ricard’s sales growth, which is a significant factor for the company’s strategic planning and investor relations.
Pernod Ricard are not the only French alcohol producer feeling the pain. There are considerably bigger problems going on over at Remy Cointreau, where their share price has taken a pounding. You can read more about Remy Cointreau and their struggle if you CLICK HERE.
