Remy Cointreau (RCO) AI Stock Analysis

• Market Cap: €2.48B
• Dividend Yield: 4.18%
• Average Volume (3M): 112.85K
• Price to Earnings (P/E): 20.3
• Beta (1Y): 1.17
• Revenue Growth: -17.22%
• EPS Growth: -11.33%
• Country: FR
• Employees: 1,943
• Sector: Consumer Defensive
• Sector Strength: 56
• Industry: Beverages - Wineries & Distilleries
• EPS (TTM): 0.78
• Shares Outstanding: 52,160,290
• 10 Day Avg. Volume: 112,514
• 30 Day Avg. Volume: 112,846
• PEG Ratio: 0.77
• Price to Book (P/B): 4.86
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 201.92
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €56.94
• Price Target Upside: 19.12% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 71 Outperform
• Price Target: ―

Remy Cointreau's stock reflects a balanced position. Key strengths include stable profitability margins and attractive valuation, with a solid dividend yield. However, challenges in revenue and cash flow generation pose risks. Technical analysis shows positive momentum, but close attention to potential overbought conditions is advised.

Positive Factors

Earnings Guidance

FY25 guidance was confirmed, with a gradual recovery in sales over the year while protecting profitability.

Investment Outlook

For long-term investors, the risk-reward looks skewed to the upside.

Product Performance

With cognac driving respectively 65% and 80%+ of FY24 sales and EBIT, a positive surprise on cognac is generally good news.

Negative Factors

Market Conditions

Excess cognac inventory and negative depletions in the US, retaliation risk on duty taxes in China and overall weakness in EMEA are the main short-term headwinds.

Sales Performance

1Q25 organic sales growth came below expectations at -15.6% driven by Liqueurs & Spirits (all regions), while the decline in Cognac organic sales was -12.2% (better-than-expected driven by flat China).

Taxation Impact

The recent tax implementation by Chinese MOFCOM is another setback.

Remy Cointreau Business Overview & Revenue Model

Company Description

Rémy Cointreau SA, together with its subsidiaries, engages in the production, sale, and distribution of liqueurs and spirits. The company operates through Rémy Martin, Liqueurs & Spirits, and Partner Brands segments. It offers liqueurs, brandy, gin, single malt whisky, rum, wine, and champagne primarily under the Cointreau, Metaxa, St-Rémy, Mount Gay, Bruichladdich, Port Charlotte, Octomore, The Botanist, Westland, LOUIS XIII, and Domaine des Hautes Glaces brands. The operates in Europe, the Middle East, Africa, the Americas, Asia, Australia, and New Zealand. Rémy Cointreau SA was founded in 1724 and is headquartered in Cognac, France.

How the Company Makes Money

Remy Cointreau generates revenue through the sale of its premium spirits, focusing on the high-end segment of the market. The company's primary revenue streams come from its flagship cognac brand, Remy Martin, and its liqueur brand, Cointreau. Additionally, the company benefits from its portfolio of single malt whiskies, including Bruichladdich. Remy Cointreau leverages its global distribution network to reach consumers in various international markets. The company also forms strategic partnerships and invests in marketing campaigns to enhance brand visibility and drive sales. Factors such as consumer preferences for luxury and premium products, as well as brand heritage, significantly contribute to its earnings.

Remy Cointreau Financial Statement Overview

Summary

Remy Cointreau presents a mixed financial scenario. Despite healthy profitability margins, declining revenue and net income pose challenges. The balance sheet is stable with moderate leverage and strong equity, but cash flow performance indicates potential liquidity constraints. Focus on revenue growth and cash generation will be crucial for future financial health.

Income Statement

Remy Cointreau's income statement shows mixed performance with declining revenue and net income in the latest year. The gross profit margin stands strong at approximately 71.2%, indicating efficient cost management. However, the net profit margin dropped to 15.5%, reflecting reduced profitability. The EBIT margin is healthy at 24.4%, while EBITDA margin remains robust at 27.6%. The revenue growth rate is negative, highlighting a significant challenge in maintaining sales momentum.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.40, indicating moderate leverage. Return on equity (ROE) is relatively strong at 10.0%, showcasing effective utilization of shareholder funds. The equity ratio is satisfactory at 54.7%, suggesting a strong asset base relative to liabilities, contributing to financial stability.

Cash Flow

Cash flow analysis reveals challenges with a declining free cash flow growth rate. The operating cash flow to net income ratio is low at 0.51, indicating that net income is not fully translating into cash flow. The free cash flow to net income ratio is modest at 0.07, suggesting limited cash generation from operations after capital expenditures.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	1.09B	1.19B	1.55B	1.31B	1.01B	1.02B
Gross Profit	777.10M	850.10M	1.06B	861.10M	646.10M	643.50M
EBITDA	308.80M	330.10M	461.90M	374.40M	270.00M	248.50M
Net Income	163.80M	184.80M	293.80M	212.50M	144.50M	113.40M
Balance Sheet
Total Assets	3.37B	3.37B	3.21B	2.99B	2.78B	2.79B
Cash, Cash Equivalents and Short-Term Investments	48.60M	93.00M	73.70M	116.30M	201.00M	269.40M
Total Debt	693.00M	742.80M	607.00M	467.40M	513.10M	719.60M
Total Liabilities	1.47B	1.53B	1.45B	1.33B	1.23B	1.39B
Stockholders Equity	1.90B	1.85B	1.75B	1.66B	1.55B	1.40B
Cash Flow
Free Cash Flow	105.00M	13.70M	42.20M	90.30M	123.00M	15.70M
Operating Cash Flow	166.90M	94.60M	124.10M	144.80M	177.00M	80.50M
Investing Cash Flow	-58.40M	-80.40M	-59.30M	-65.70M	8.40M	-52.50M
Financing Cash Flow	-339.10M	7.20M	-107.20M	-175.10M	-253.20M	62.10M

Remy Cointreau Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 47.80
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:RCO, the sentiment is Positive. The current price of 47.8 is above the 20-day moving average (MA) of 46.68, above the 50-day MA of 47.36, and below the 200-day MA of 52.80, indicating a neutral trend. The MACD of -0.48 indicates Negative momentum. The RSI at 55.88 is Neutral, neither overbought nor oversold. The STOCH value of 94.51 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FR:RCO.

Remy Cointreau Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RCO	71 Outperform	€2.48B	20.28	6.42%	4.18%	-17.22%	-11.33%
Sector *	63 Neutral	€16.10B	12.71	-4.55%	4.01%	-1.83%	-144.94%
0MV6		€555.59M	11.70	7.71%	2.24%	―	―
0DQP		€351.25M	36.31	4.63%	―	―	―
0O33		€598.65M	20.30	9.31%	3.75%	―	―
0HAT		€22.84B	20.94	6.70%	5.15%	―	―
GQ6		€250.19M	10.25	6.53%	2.09%	―	―