Davide Campari-Milano SpA (CPR) AI Stock Analysis

• Market Cap: €11.55B
• Dividend Yield: 1.06%
• Average Volume (3M): 7.41M
• Price to Earnings (P/E): 37.5
• Beta (1Y): 0.57
• Revenue Growth: 5.18%
• EPS Growth: -42.47%
• Country: IT
• Employees: 5,182
• Sector: Consumer Defensive
• Sector Strength: 53
• Industry: Beverages - Wineries & Distilleries
• EPS (TTM): N/A
• Shares Outstanding: 1,231,267,700
• 10 Day Avg. Volume: 7,820,420
• 30 Day Avg. Volume: 7,407,029
• PEG Ratio: -0.92
• Price to Book (P/B): 1.90
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 46.22
• 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: €6.79
• Price Target Upside: 10.41% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 8

• Rating: 65 Neutral
• Price Target: €6.00 ▼(-2.44%Downside)

The stock's score is primarily driven by its strong financial performance, with solid revenue growth and improving cash flow metrics. However, challenges such as declining net profitability, high leverage, and a high P/E ratio limit its overall attractiveness. The technical analysis indicates neutral momentum, and the valuation suggests the stock may be overvalued. These factors combined result in a moderate overall stock score.

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 N.V., together with its subsidiaries, markets and distributes alcoholic and non-alcoholic beverages in the Americas, the Middle East, Africa, Europe, and the Asia-Pacific. It offers range of spirits categories, including aperitif, vodka, liqueurs, bitters, whisky, tequila, rum, gin, and cognac, as well as champagne and non-alcoholic aperitif under various brands, such as Aperol, Campari, SKYY, Wild Turkey, Grand Marnier, Appleton Estate, Wray & Nephew Overproof, and other brands. The company was founded in 1860 and is headquartered in Sesto San Giovanni, Italy. Davide Campari-Milano N.V. is a subsidiary of Lagfin S.C.A., Société en Commandite par Actions.

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 demonstrates strong revenue growth and gross profit margins but faces challenges with declining net profitability and high leverage. Cash flow metrics show improvement, highlighting better cash conversion and capital management. The company's financial health is stable, but attention to operational efficiency and leverage management is crucial for sustained growth.

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
EBITDA	493.40M	647.50M	608.70M	499.60M	330.50M
Net Income	201.60M	330.50M	333.00M	284.80M	187.90M
Balance Sheet
Total Assets	8.48B	6.68B	6.02B	5.09B	4.56B
Cash, Cash Equivalents and Short-Term Investments	673.80M	634.20M	450.40M	804.80M	549.10M
Total Debt	2.86B	2.25B	1.80B	1.53B	1.54B
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	670.50M	156.50M	380.40M	483.70M	272.20M
Investing Cash Flow	-1.60B	-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: Positive
• Last Price: 6.15
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:CPR, the sentiment is Positive. The current price of 6.15 is above the 20-day moving average (MA) of 5.84, above the 50-day MA of 5.80, and above the 200-day MA of 5.94, indicating a bullish trend. The MACD of 0.12 indicates Negative momentum. The RSI at 63.01 is Neutral, neither overbought nor oversold. The STOCH value of 84.68 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
Sector *	65 Neutral	$26.93B	15.26	-4.27%	3.16%	1.02%	1.89%
CPR	65 Neutral	€11.55B	37.46	5.95%	1.06%	5.18%	-42.47%
0GEJ		€114.79M	13.42	9.43%	3.58%	―	―
WRG		€253.89M	8.31	11.62%	3.45%	―	―
IWB		€196.64M	8.71		2.40%	―	―
NWL		€765.01M	4.78		―	―	―