Davide Campari-Milano SpA (CPR) AI Stock Analysis

• Market Cap: €10.41B
• Dividend Yield: 1.15%
• Average Volume (3M): 7.40M
• Price to Earnings (P/E): 33.8
• Beta (1Y): 0.61
• Revenue Growth: 5.18%
• EPS Growth: -42.47%
• Country: IT
• Employees: 5,182
• Sector: Consumer Defensive
• Sector Strength: 64
• Industry: Beverages - Wineries & Distilleries
• EPS (TTM): N/A
• Shares Outstanding: 1,231,267,700
• 10 Day Avg. Volume: 7,239,415
• 30 Day Avg. Volume: 7,404,210
• PEG Ratio: 1.60
• Price to Book (P/B): 3.99
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 425.30
• 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: €7.06
• Price Target Upside: 24.51% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 8

• Rating: 65 Neutral
• Price Target: €6.00 ▲(5.82%Upside)

The overall stock score is driven mainly by solid financial performance with good revenue growth and gross profit margins, but offset by declining net margins and higher leverage. Technical indicators suggest a neutral market position, and the high valuation limits potential upside. Focus on improving operational efficiency and managing leverage is key for future growth.

Positive Factors

Earnings

4Q24 results showed a 3% beat on organic top-line growth and 140bp beat on underlying EBIT margin.

Financial Performance

FY24 FCF reached €0.6bn, up €0.5bn mainly due to working capital improvements.

Future Outlook

FY25 margins are expected to rebound as a combination of stronger fixed-cost absorption, raw materials tailwind, and the first positive impact of the reorganization.

Negative Factors

Earnings Miss

3Q24 organic sales down -1.4% translating into a 23% miss on adj. EBIT consensus, driven by all regions.

Profitability Pressure

The FY24 guidance was slashed to +LSD top-line growth with continued pressure on profitability.

Tariffs

25% tariffs on U.S. imports from Mexico, Canada and Europe would cost an annualized €90-100m before any mitigation.

Davide Campari-Milano SpA Business Overview & Revenue Model

Company Description

Davide Campari-Milano SpA, commonly known as Campari Group, is a leading global player in the spirits industry with a rich history dating back to 1860. The company is headquartered in Milan, Italy, and operates in the beverage sector with a diverse portfolio of premium and iconic brands. Its core products include a wide range of spirits, wines, and non-alcoholic beverages, with some of its most renowned brands being Campari, Aperol, Skyy Vodka, and Grand Marnier. Campari Group is dedicated to delivering high-quality products that cater to a variety of consumer preferences worldwide.

How the Company Makes Money

Campari Group generates revenue primarily through the production, marketing, and sale of its extensive portfolio of alcoholic and non-alcoholic beverages. The company's key revenue streams include the sale of spirits, wines, and soft drinks across various international markets. Campari Group leverages its strong brand portfolio and extensive distribution network to penetrate both mature and emerging markets, enhancing visibility and brand loyalty. Strategic acquisitions and partnerships also play a significant role in expanding its market reach and product offerings. Additionally, the company invests in marketing and promotional activities to strengthen brand recognition and consumer engagement, further driving sales and profitability.

Davide Campari-Milano SpA Financial Statement Overview

Summary

Davide Campari-Milano SpA shows solid revenue growth and strong gross profit margins, but faces challenges with declining net profitability and increased leverage. Improved cash flow metrics highlight better cash conversion and capital management.

Income Statement

Davide Campari-Milano SpA shows a robust gross profit margin, consistently around 57-58% over the years, indicating strong pricing power and cost management. However, the net profit margin has declined from 10.6% in 2023 to 6.6% in 2024. Revenue growth is healthy at 5.2% from 2023 to 2024, but a significant drop in EBIT margin from 18.5% to 12.8% suggests rising costs or pricing pressures impacting operational efficiency.

Balance Sheet

The company's debt-to-equity ratio increased from 0.77 in 2023 to 0.74 in 2024, indicating higher leverage which could pose risks if not managed properly. The ROE decreased from 11.3% in 2023 to 5.2% in 2024, pointing to reduced efficiency in generating returns for shareholders. However, the equity ratio remains stable, highlighting a well-capitalized balance sheet.

Cash Flow

The operating cash flow to net income ratio improved significantly from 0.47 in 2023 to 3.32 in 2024, showing improved cash conversion efficiency. However, free cash flow growth is volatile, with a shift from negative to positive, reflecting improved capital expenditure management. The free cash flow to net income ratio also improved from -0.48 to 1.04, indicating stronger cash flow relative to earnings.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
3.07B	2.92B	2.70B	2.17B	1.77B
	Gross Profit
1.77B	1.70B	1.59B	1.30B	1.03B
	EBIT
392.40M	540.20M	511.50M	400.80M	231.80M
	EBITDA
493.40M	647.50M	608.70M	499.60M	330.50M
	Net Income Common Stockholders
201.60M	330.50M	333.00M	284.80M	187.90M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
673.80M	634.20M	450.40M	804.80M	549.10M
	Total Assets
8.48B	6.68B	6.02B	5.09B	4.56B
	Total Debt
2.86B	2.25B	1.80B	1.53B	1.54B
	Net Debt
2.20B	1.63B	1.37B	741.40M	994.30M
	Total Liabilities
4.63B	3.75B	3.34B	2.72B	2.56B
	Stockholders Equity
3.85B	2.93B	2.68B	2.37B	2.00B
Cash Flow		Free Cash Flow
210.40M	-158.80M	25.10M	337.90M	187.50M
	Operating Cash Flow
618.80M	156.50M	380.40M	483.70M	272.20M
	Investing Cash Flow
-1.64B	-281.10M	-805.90M	-153.20M	-252.40M
	Financing Cash Flow
981.80M	323.00M	38.20M	-115.60M	-139.70M

Davide Campari-Milano SpA Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 5.67
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:CPR, the sentiment is Negative. The current price of 5.67 is below the 20-day moving average (MA) of 5.69, below the 50-day MA of 5.70, and below the 200-day MA of 6.10, indicating a bearish trend. The MACD of -0.01 indicates Positive momentum. The RSI at 45.30 is Neutral, neither overbought nor oversold. The STOCH value of 22.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IT:CPR.

Davide Campari-Milano SpA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VLS	79 Outperform	€119.97M	14.47	9.43%	3.45%	3.49%	14.45%
ORS	70 Neutral	€249.33M	8.24	11.62%	3.51%	1.98%	-42.30%
CPR	65 Neutral	€10.41B	33.77	5.95%	1.15%	5.18%	-42.47%
Sector *	65 Neutral	$8.73B	15.10	4.69%	4.08%	3.64%	-2.90%