Pernod Ricard : Is the distribution phase coming to an end ?

07/06/2022 | 02:47am EDT

long trade Target price hit

Entry price : 177.1€ | Target : 196€ | Stop-loss : 168.5€ | Potential : 10.67%

Pernod Ricard shares are locked into a trading range. This phase will eventually have to end with a return of a clear trend. Investors have an opportunity to buy the stock and target the € 196.

Summary

• The company's Refinitiv ESG score, based on a ranking of the company relative to its industry, comes out particularly well.

Strengths

• The company's EBITDA/Sales ratio is relatively high and results in high margins before depreciation, amortization and taxes.
• The group's high margin levels account for strong profits.
• Over the last twelve months, the sales forecast has been frequently revised upwards.
• Analysts have consistently raised their revenue expectations for the company, which provides good prospects for the current and next years in terms of revenue growth.
• For the past year, analysts covering the stock have been revising their EPS expectations upwards in a significant manner.
• Considering the small differences between the analysts' various estimates, the group's business visibility is good.

Weaknesses

• The group shows a rather high level of debt in proportion to its EBITDA.
• The firm trades with high earnings multiples: 23.03 times its 2022 earnings per share.
• Based on current prices, the company has particularly high valuation levels.
• In relation to the value of its tangible assets, the company's valuation appears relatively high.
• The valuation of the company is particularly high given the cash flows generated by its activity.
• The group usually releases earnings worse than estimated.

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