Remy Cointreau (RCO) AI Stock Analysis

• Market Cap: €2.75B
• Dividend Yield: 2.85%
• Average Volume (3M): 88.77K
• Price to Earnings (P/E): 22.5
• Beta (1Y): 1.38
• Revenue Growth: -17.54%
• EPS Growth: -35.36%
• Country: FR
• Employees: 1,943
• Sector: Consumer Defensive
• Sector Strength: 45
• Industry: Beverages - Wineries & Distilleries
• EPS (TTM): 0.78
• Shares Outstanding: 52,160,290
• 10 Day Avg. Volume: 72,927
• 30 Day Avg. Volume: 88,771
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: €52.71
• Price Target Upside: 0.02% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10

• Rating: 69 Neutral
• Price Target: €60.00 ▲(13.85% Upside)

Remy Cointreau demonstrates strong technical indicators with stock price momentum, providing a positive outlook. However, challenges in financial performance, particularly in revenue growth and cash flow, along with a high P/E ratio, indicate potential risks. The dividend yield offers some support to the valuation.

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 primarily through the sale of its premium spirits across various markets. The company's revenue model is heavily reliant on its strong brand portfolio, particularly in the Cognac segment, which accounts for a significant portion of its sales. Key revenue streams include direct sales to distributors, retail sales, and exports, with a notable focus on Asia and North America as growth markets. Additionally, the company benefits from strategic partnerships with distributors and retailers, enhancing its market presence and driving sales. Factors contributing to its earnings include the rising demand for premium and super-premium spirits, effective marketing strategies, and a commitment to quality production, which collectively position Remy Cointreau as a leader in the luxury spirits market.

Remy Cointreau Financial Statement Overview

Summary

Remy Cointreau shows strong profitability margins and a solid balance sheet with low leverage. However, the company faces challenges with negative revenue growth and cash flow generation, which could pose risks if not addressed.

Income Statement

Remy Cointreau's income statement reflects some challenges over the past year with a noticeable decrease in revenue and net income. The gross profit margin for the most recent year was approximately 70.56%, and the net profit margin was around 12.31%, both indicating solid profitability despite reduced revenue. However, the revenue growth rate has fallen by 17.52% from the previous year, highlighting a contraction in sales. EBIT and EBITDA margins are healthy at 21.43% and 25.31% respectively, suggesting stable operational efficiency.

Balance Sheet

The balance sheet of Remy Cointreau shows a stable financial position with a debt-to-equity ratio of approximately 0.39, indicating a conservative leverage approach. The return on equity (ROE) stands at 6.28%, reflecting moderate profitability relative to equity. The equity ratio is about 56.34%, showing a strong equity base supporting the company’s assets. Overall, the company maintains a solid balance sheet with manageable debt levels.

Cash Flow

The cash flow analysis shows some areas of concern. The free cash flow growth rate is negative due to a decrease in operating cash flow, which fell from €94.6M to €70.4M. The operating cash flow to net income ratio is approximately 0.58, indicating some challenges in converting net income into cash. The free cash flow to net income ratio stands at around 0.58 as well, which suggests limited free cash flow generation relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	984.60M	984.60M	1.19B	1.55B	1.31B	1.01B
Gross Profit	670.90M	694.80M	850.10M	1.06B	861.10M	646.10M
EBITDA	248.70M	249.20M	330.10M	461.90M	374.40M	270.00M
Net Income	121.30M	121.20M	184.80M	293.80M	212.50M	144.50M
Balance Sheet
Total Assets	3.42B	3.42B	3.37B	3.21B	2.99B	2.78B
Cash, Cash Equivalents and Short-Term Investments	83.10M	83.10M	93.00M	73.70M	116.30M	201.00M
Total Debt	758.64M	758.64M	742.80M	607.00M	467.40M	513.10M
Total Liabilities	1.49B	1.49B	1.53B	1.45B	1.33B	1.23B
Stockholders Equity	1.93B	1.93B	1.85B	1.75B	1.66B	1.55B
Cash Flow
Free Cash Flow	19.20M	70.40M	13.70M	42.20M	90.30M	123.00M
Operating Cash Flow	70.40M	70.40M	94.60M	124.10M	144.80M	177.00M
Investing Cash Flow	-48.40M	-48.40M	-80.40M	-59.30M	-65.70M	8.40M
Financing Cash Flow	-31.90M	-31.90M	7.20M	-107.20M	-175.10M	-253.20M

Remy Cointreau Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 52.70
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:RCO, the sentiment is Neutral. The current price of 52.7 is below the 20-day moving average (MA) of 54.09, below the 50-day MA of 52.84, and above the 200-day MA of 50.27, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 46.65 is Neutral, neither overbought nor oversold. The STOCH value of 23.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FR:RCO.

Remy Cointreau Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RCO	69 Neutral	€2.75B	22.55	6.42%	2.85%	-17.54%	-35.36%
Sector *	63 Neutral	$20.50B	14.76	-2.72%	3.09%	1.90%	-4.74%
0MV6	―	€540.19M	11.47	7.71%	―	―	―
0DQP	―	€335.59M	34.22	4.63%	―	―	―
0O33	―	€612.82M	20.44	9.31%	3.68%	―	―
0HAT	―	€24.26B	22.13	6.70%	―	―	―
GQ6	―	€251.54M	10.25	6.53%	―	―	―