Pernod Ricard (RI) AI Stock Analysis

• Market Cap: €23.67B
• Dividend Yield: 4.99%
• Average Volume (3M): 590.36K
• Price to Earnings (P/E): 21.6
• Beta (1Y): 0.98
• Revenue Growth: -3.68%
• EPS Growth: -45.85%
• Country: FR
• Employees: 19,557
• Sector: Consumer Defensive
• Sector Strength: 59
• Industry: Beverages - Wineries & Distilleries
• EPS (TTM): 5.06
• Shares Outstanding: 252,269,200
• 10 Day Avg. Volume: 621,601
• 30 Day Avg. Volume: 590,356
• PEG Ratio: -0.84
• Price to Book (P/B): 1.42
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 21.50
• 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: €106.77
• Price Target Upside: 13.32% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 71 Outperform
• Price Target: €106.00 ▲(12.50%Upside)

Pernod Ricard's strong profitability and fair valuation provide a solid foundation, though recent declines in revenue and cash flow pose risks. Mixed technical signals suggest caution, as the stock approaches overbought territory. Investors should monitor leveraging and cash flow improvements for future growth.

Positive Factors

Geographical Diversification

Pernod Ricard has a broad geographical footprint which allows it to weather challenging conditions in key markets like the US and China.

Market Expansion

Pernod Ricard has established a strong presence beyond the US and China, with double-digit growth from 2019 to 2024 in Brazil, Poland, Turkey, and Japan.

Negative Factors

Macroeconomic Concerns

Key risks include potential further deterioration in macroeconomic conditions in China and slower than expected market recovery in the US.

Operational Challenges

The stock has been downgraded to HOLD with a revised target price of EUR86, due to the increasingly challenging operating environment and potential delay in earnings recovery until FY27 or later.

Pernod Ricard Business Overview & Revenue Model

Company Description

Pernod Ricard (RI) is a global leader in the wine and spirits industry, known for its extensive portfolio of premium brands. Headquartered in Paris, France, the company operates through two primary business sectors: Wines & Champagnes and Spirits. Its core products include renowned brands such as Absolut Vodka, Chivas Regal, Jameson Irish Whiskey, Martell Cognac, and Perrier-Jouët Champagne. Pernod Ricard is dedicated to innovation and sustainability, continually expanding its offerings to meet the evolving preferences of consumers worldwide.

How the Company Makes Money

Pernod Ricard generates revenue primarily through the production, distribution, and sale of its alcoholic beverages. The company's key revenue streams include the sale of spirits, wines, and champagnes across various global markets. Pernod Ricard leverages its strong brand portfolio and extensive distribution network to maintain a competitive edge in the industry. Strategic acquisitions and partnerships also play a significant role in its growth and earnings, enabling the company to expand its product offerings and market reach. Additionally, Pernod Ricard invests in marketing and brand development to enhance consumer engagement and drive sales.

Pernod Ricard Financial Statement Overview

Summary

Pernod Ricard shows strong profitability and operational efficiency with robust margins. However, recent declines in revenue and cash flow growth are concerning, and managing leverage is crucial.

Income Statement

Pernod Ricard's revenue has shown volatility, with a recent decline from 2023 to 2024. Despite this, the company maintains strong profitability, evidenced by its high gross profit margin of 60.1% and a solid net profit margin of 12.7% for 2024. EBIT and EBITDA margins are also robust at 23.5% and 27.5%, respectively, indicating efficient operational management. However, the recent revenue contraction highlights a potential risk in sustaining growth.

Balance Sheet

The balance sheet shows a stable financial structure, with a Debt-to-Equity ratio of 0.86, suggesting moderate leverage. The Return on Equity (ROE) stands at 9.4%, indicating moderate returns for equity holders. The equity ratio is 40.2%, reflecting a balanced asset financing strategy. However, the increase in total debt over the years points to potential risks if not managed prudently.

Cash Flow

Cash flow analysis reveals a decrease in free cash flow from 2023 to 2024, with a negative free cash flow growth rate of -28.3%. The operating cash flow to net income ratio of 1.17 indicates a satisfactory conversion of earnings to cash. However, the free cash flow to net income ratio of 0.65 suggests room for improvement in cash generation relative to profits.

Breakdown	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	11.60B	12.14B	10.70B	8.82B	8.45B
Gross Profit	6.97B	7.25B	6.47B	5.29B	5.09B
EBITDA	3.19B	3.75B	3.33B	2.63B	2.61B
Net Income	1.48B	2.26B	2.00B	1.30B	329.00M
Balance Sheet
Total Assets	39.19B	37.68B	36.01B	32.15B	31.52B
Cash, Cash Equivalents and Short-Term Investments	2.68B	1.61B	2.53B	2.08B	1.95B
Total Debt	13.62B	11.87B	11.17B	9.60B	10.41B
Total Liabilities	22.39B	20.96B	19.76B	17.07B	17.31B
Stockholders Equity	15.75B	15.72B	15.94B	14.83B	13.97B
Cash Flow
Free Cash Flow	954.00M	1.33B	1.79B	1.57B	816.00M
Operating Cash Flow	1.73B	2.03B	2.29B	2.00B	1.18B
Investing Cash Flow	-676.00M	-1.73B	-1.20B	-486.00M	-939.00M
Financing Cash Flow	-209.00M	-1.12B	-683.00M	-1.41B	795.00M

Pernod Ricard Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 94.22
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:RI, the sentiment is Positive. The current price of 94.22 is above the 20-day moving average (MA) of 90.33, above the 50-day MA of 91.19, and below the 200-day MA of 101.56, indicating a neutral trend. The MACD of 1.07 indicates Negative momentum. The RSI at 59.47 is Neutral, neither overbought nor oversold. The STOCH value of 59.80 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FR:RI.

Pernod Ricard Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LPE	73 Outperform	€566.25M	11.92	7.71%	2.20%	-5.80%	-25.32%
RI	71 Outperform	€23.67B	21.60	6.70%	4.99%	-3.68%	-45.85%
RCO	70 Outperform	€2.80B	22.91	6.42%	3.70%	-17.54%	-35.36%
SBT	69 Neutral	€585.78M	19.58	9.31%	3.85%	-7.56%	-10.97%
Sector *	65 Neutral	€15.11B	13.08	-4.03%	3.81%	-1.58%	-101.37%
MBWS	58 Neutral	€335.59M	34.80	4.63%	―	-3.00%	10.37%
VRAP	55 Neutral	€109.66M	119.90	0.22%	6.48%	-10.16%	-85.13%