Oddo BHF confirms its 'outperform' rating on Pernod Ricard shares, with an unchanged target price of 198 euros.

The research firm believes that, with momentum reversing, the current valuation level offers an attractive entry point for a "quality stock".

"We also appreciate Pernod Ricard's prudence, which was already drawing attention to the 'Latam' (Latin America) market in September (pre-quiet call), two months before Diageo's warning", stresses the broker.

As a reminder, the 'Latam' spirits market has to contend with high inventory levels at wholesalers and a slowdown in local consumption.

Oddo BHF believes that Pernod Ricard will be less affected than its British counterpart Diageo, due to its lower exposure to this market, a different positioning and a product mix that protects it more than Diageo's downtrading.

"We have revised our organic sales growth estimates to -0.7% in FY 23/24th in the Americas vs. +0.7% previously and +1.1% for the consensus. At group level, we now expect organic sales growth of 3.6% in FY 23/24e vs. 4% previously, and EPS growth of 0.1% vs. 0.5% previously', concludes the analyst.


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