Pernod Ricard shares rose sharply on the Paris Bourse on Thursday, buoyed by a note from Deutsche Bank, which raised its recommendation on the stock a month ahead of the publication of quarterly sales.

At around 9.15 a.m., the share price was up 1.3%, one of the biggest gains on a CAC 40 index up by around 0.5%.

In a note, Deutsche Bank said it had upgraded its rating on the spirits group from 'sell' to 'hold', and raised its target price from €135 to €140.

The broker points out that the stock has largely underperformed since it was downgraded to 'sell' at the beginning of 2023, falling 24% over the period, 21% behind the STOXX Europe 600 Food & Beverage and 47% behind the STOXX Europe 600.

We consider that the stock is now well valued and that its risk/return profile is now correctly balanced", explains the research department.

Deutsche warns, however, that the group remains exposed to the normalization of the US spirits market, to market share losses in the US, as well as to economic uncertainty and regulatory developments in China.

Pernod Ricard is due to publish sales for its 3rd fiscal quarter on April 25 ahead of trading.

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