Rémy Cointreau : Hesitation should subside in favor of volatility

05/03/2022 | 02:42am EDT

long trade Stop-loss triggered

Entry price : 192.2€ | Target : 214€ | Stop-loss : 173€ | Potential : 11.34%

Rémy Cointreau shares stand out with an interesting technical chart pattern displaying horizontal consolidation. One would assume that the current accumulation phase will cede eventually to an acceleration to the upside. Investors have an opportunity to buy the stock and target the € 214.

Summary

• The company has strong fundamentals. More than 70% of companies have a lower mix of growth, profitability, debt and visibility.

Strengths

• The company's EBITDA/Sales ratio is relatively high and results in high margins before depreciation, amortization and taxes.
• The company returns high margins, thereby supporting business profitability.
• Over the last twelve months, the sales forecast has been frequently revised upwards.
• For the past year, analysts covering the stock have been revising their EPS expectations upwards in a significant manner.
• The opinion of analysts covering the stock has improved over the past four months.
• Consensus analysts have strongly revised their opinion of the company over the past 12 months.

Weaknesses

• With an expected P/E ratio at 48.17 and 38.03 respectively for both the current and next fiscal years, the company operates with high earnings multiples.
• The company's "enterprise value to sales" ratio is among the highest in the world.
• The company appears highly valued given the size of its balance sheet.
• The company is highly valued given the cash flows generated by its activity.
• The firm pays small or no dividend to shareholders. For that reason, it is not a yield company.
• The price targets of analysts who cover the stock differ significantly. This implies difficulties in evaluating the company and its business.

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