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Pernod Ricard (PRNDY)
OTHER OTC:PRNDY
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Pernod Ricard
(OTC:PRNDY)
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Rating:66Neutral
Price Target:
$17.00
â–¼(-3.79% Downside)
Action:DowngradedDate:11/19/25
Pernod Ricard's strong valuation and financial performance are offset by bearish technical indicators and challenges in key markets. The stock's attractive dividend yield and low P/E ratio provide a cushion, but market sentiment remains cautious due to recent sales declines.
Positive Factors
Strong brand portfolio & premiumization
Pernod Ricard's portfolio shows persistent premium brand momentum and successful new SKUs, which drive pricing power and mix improvement. Durable brand equity across spirits categories supports higher margins and resilience versus commoditized competitors, underpinning long-term profitability.
Operational efficiency and margin expansion
Completed EUR900m efficiencies and a focus on margin expansion demonstrate repeatable cost discipline. Structural efficiency programs expand operating leverage, supporting sustainable margin improvement even if top-line growth lags, and the announced new EUR1bn program indicates continued focus on durable cost competitiveness.
Strong cash generation and free cash flow
Recurring FCF of over EUR1bn and improved working capital management indicate robust cash generation capacity. This durable cash flow supports dividends, reinvestment in brands, debt servicing and strategic M&A optionality, enhancing financial flexibility over a multi-year horizon.
Negative Factors
Recent revenue decline trend
A multi-period revenue decline highlights persistent demand headwinds in key markets. Structural top-line weakness can erode scale benefits and put pressure on future margin targets, requiring sustained brand investment and structural recovery to return to consistent organic growth.
Significant exposure to China market risks
A 21% organic sales drop in China reflects structural and regulatory risks that can persist. Heavy exposure to this market means local policy and sentiment shifts can materially reduce premium product demand and slow global growth recovery, requiring careful market-specific strategies to restore volumes.
Inconsistent cash conversion from income to operating cash
Operating cash flow trailing net income signals volatility in cash conversion, which can limit the company's ability to fund investments or defend payouts during downturns. Despite healthy FCF in the latest period, inconsistent conversion is a structural risk to durable liquidity and capital allocation plans.
Pernod Ricard (PRNDY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$19.83B
Dividend Yield5.55%
Average Volume (3M)255.08K
Price to Earnings (P/E)4.7
Beta (1Y)0.62
Revenue Growth-5.04%
EPS Growth11.11%
CountryUS
Employees19,557
SectorConsumer Defensive
Sector Strength42
IndustryBeverages - Wineries & Distilleries
Share Statistics
EPS (TTM)0.95
Shares Outstanding1,261,346,000
10 Day Avg. Volume0
30 Day Avg. Volume255,084
Financial Highlights & Ratios
PEG Ratio1.24
Price to Book (P/B)1.41
Price to Sales (P/S)1.95
P/FCF Ratio19.08
Enterprise Value/Market Cap1.43
Enterprise Value/Revenue2.84
Enterprise Value/Gross Profit4.86
Enterprise Value/Ebitda9.86
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)1.38
Revenue Forecast (FY)$11.28B
Pernod Ricard Business Overview & Revenue Model
Company DescriptionPernod Ricard (PRNDY) is a global leader in the wine and spirits industry, renowned for its diverse portfolio of premium brands. The company operates in two main sectors: spirits and wine, offering a wide range of products that include well-known labels such as Absolut Vodka, Jameson Irish Whiskey, Chivas Regal, and Jacob's Creek. Pernod Ricard's business model emphasizes a strong commitment to quality and innovation, alongside a focus on sustainability and social responsibility.
How the Company Makes MoneyPernod Ricard primarily makes money by selling branded alcoholic beverages to distributors, retailers, and on-trade customers, generating revenue from the volume of cases sold and the net price per case (often supported by premium brand positioning). Key revenue streams include (1) Spirits: Sales of core and premium spirits across multiple categories; profitability is typically driven by brand equity, pricing power, product mix (premiumization), and scale in production and distribution. (2) Wines and champagne: Sales of wine and champagne brands through similar channels, with results influenced by brand strength, availability, and vintage-related supply dynamics where applicable. (3) Travel retail: Sales in duty-free and travel hubs (airports and other travel locations), which can command strong margins and brand-building visibility for prestige products. The company’s earnings are supported by brand-led marketing and innovation (e.g., line extensions, new products, packaging), route-to-market execution via country affiliates and third-party distributors, and disciplined portfolio management (investment behind priority brands and markets). Significant factors influencing revenue and profit include consumer demand trends, pricing and promotional strategy, mix shift toward higher-end products, regulatory and tax regimes on alcohol, currency movements (given global sales), and the performance of key distribution relationships; specific named partnership terms are null.
Pernod Ricard Earnings Call Summary
Earnings Call Date:Aug 28, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Aug 27, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with significant achievements in operational efficiencies and cash flow management. However, these were offset by declines in key markets such as China and the U.S., leading to a cautious outlook for the fiscal year '26.Q4-2025 Updates
Positive Updates
Strong Cash Flow Management
Free cash flow reached EUR 1.133 billion, up 18%, with strong operating working capital management leading to an improvement in cash conversion.
Operational Efficiencies Achieved
EUR 900 million in operational efficiencies were completed, contributing to strong organic operating margin expansion of 64%.
Innovation and Brand Performance
Innovations such as Absolut Ocean Spray and Kahlúa Dunkin were highlighted as successful, with strong double-digit growth for brands like Jameson and Bumbu.
Negative Updates
Net Sales Decline
Net sales were down 3% organically and 6% in reported terms, impacted by currency effects and declines in China, U.S.A., and GTR Asia.
Challenges in China
Organic net sales in China were down 21% due to a challenging macroeconomic environment and consumer sentiment impacted by a ban on public officials' alcohol consumption.
U.S. Market Underperformance
The U.S. market saw a decline of 6% in net sales, with a subdued consumer confidence and economic moderation affecting performance.
Company Guidance
In the fiscal year 2025 sales and results call, Pernod Ricard discussed various financial metrics and strategic initiatives. The company reported a 3% organic decline in net sales, affected by currency impacts, with a 2% volume recovery marking the third consecutive semester of growth. Despite challenges in China, the U.S., and GTR Asia, Pernod Ricard achieved organic operating margin expansion of 64%, driven by strong cost discipline and EUR 900 million in operational efficiencies. Free cash flow increased by 18% to EUR 1.133 billion, supported by effective working capital management. The company also proposed a stable dividend of EUR 4.70 per share. Looking forward, Pernod Ricard aims for organic net sales growth of 3% to 6% per annum from fiscal years 2027 to 2029, with a focus on margin expansion and a new EUR 1 billion efficiency program over the next four years.Pernod Ricard Financial Statement Overview
Summary
Pernod Ricard shows strong profitability and operational efficiency, with robust profit margins and a stable balance sheet. However, recent revenue declines and inconsistent cash flow growth highlight areas for improvement.Income Statement
Pernod Ricard has maintained strong gross and net profit margins over the years, with a gross profit margin consistently around 60% and a net profit margin improving to 14.8% in 2025. However, revenue growth has been negative in recent years, indicating potential challenges in expanding sales. The EBIT and EBITDA margins remain healthy, reflecting operational efficiency.75
Positive
Balance Sheet
The company's debt-to-equity ratio has been stable, hovering around 0.8, indicating a balanced approach to leveraging. Return on equity has shown a slight decline, but remains above 10%, suggesting decent profitability. The equity ratio is solid, reflecting a strong capital structure.70
Positive
Cash Flow
Pernod Ricard's cash flow metrics show a mixed picture. Free cash flow growth has been inconsistent, with recent positive growth following previous declines. The operating cash flow to net income ratio is below 1, indicating potential challenges in converting income into cash. However, the free cash flow to net income ratio is healthy, suggesting efficient cash management.68
Positive
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 10.00B | 10.96B | 11.60B | 12.14B | 10.70B | 8.82B |
| Gross Profit | 5.83B | 6.52B | 6.97B | 7.25B | 6.47B | 5.29B |
| EBITDA | 2.88B | 3.19B | 3.19B | 3.75B | 3.33B | 2.63B |
| Net Income | 1.40B | 1.63B | 1.48B | 2.26B | 2.00B | 1.30B |
Balance Sheet | ||||||
| Total Assets | 37.66B | 37.08B | 39.19B | 37.68B | 36.01B | 32.15B |
| Cash, Cash Equivalents and Short-Term Investments | 2.40B | 1.83B | 2.68B | 1.61B | 2.53B | 2.08B |
| Total Debt | 13.93B | 12.59B | 13.62B | 11.87B | 11.17B | 9.60B |
| Total Liabilities | 21.14B | 20.85B | 22.39B | 20.96B | 19.76B | 17.07B |
| Stockholders Equity | 15.47B | 15.21B | 15.75B | 15.72B | 15.94B | 14.83B |
Cash Flow | ||||||
| Free Cash Flow | 1.16B | 1.12B | 954.00M | 1.33B | 1.79B | 1.57B |
| Operating Cash Flow | 1.68B | 1.79B | 1.73B | 2.03B | 2.29B | 2.00B |
| Investing Cash Flow | 66.39M | -521.00M | -676.00M | -1.73B | -1.20B | -486.00M |
| Financing Cash Flow | -1.35B | -2.40B | -209.00M | -1.12B | -683.00M | -1.41B |
Pernod Ricard Technical Analysis
Negative
17.67
Price Trends
17.92
Negative
18.07
Negative
19.38
Negative
Market Momentum
-0.82
Positive
29.41
Positive
5.12
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRNDY, the sentiment is Negative. The current price of 17.67 is above the 20-day moving average (MA) of 17.47, below the 50-day MA of 17.92, and below the 200-day MA of 19.38, indicating a bearish trend. The MACD of -0.82 indicates Positive momentum. The RSI at 29.41 is Positive, neither overbought nor oversold. The STOCH value of 5.12 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PRNDY.
Pernod Ricard Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $45.57B | 13.63 | 16.90% | 8.22% | -0.68% | 4.29% | |
67 Neutral | $26.30B | 11.96 | 15.12% | 2.92% | -5.57% | 119.49% | |
66 Neutral | $19.83B | 4.74 | 9.20% | 5.55% | -5.04% | 11.11% | |
65 Neutral | $10.68B | 12.09 | 19.93% | 3.41% | -4.59% | -19.19% | |
63 Neutral | $10.68B | 12.09 | 19.93% | 3.42% | -4.59% | -19.19% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
60 Neutral | $43.08B | 6.03 | 19.40% | 4.80% | 0.22% | -38.76% |
* Consumer Defensive Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.