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Pernod Ricard (PRNDY) AI Stock Analysis

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PRNDY

Pernod Ricard

(OTC:PRNDY)

Rating:65Neutral
Price Target:
$23.00
â–²(9.37% Upside)
Pernod Ricard's stock is supported by a solid financial foundation and positive technical indicators. However, the high P/E ratio suggests potential overvaluation, and declines in key financial metrics pose challenges. The attractive dividend yield is a positive aspect for income-focused investors.

Pernod Ricard (PRNDY) vs. SPDR S&P 500 ETF (SPY)

Pernod Ricard Business Overview & Revenue Model

Company DescriptionPernod Ricard (PRNDY) is a leading global producer and distributor of premium spirits and wines. Headquartered in Paris, France, the company operates in the alcoholic beverage sector, offering a diverse portfolio of internationally recognized brands. These include iconic names such as Absolut Vodka, Chivas Regal, Jameson Irish Whiskey, Martell Cognac, and Perrier-Jouët Champagne. Pernod Ricard is committed to sustainable growth and innovation, with a significant presence in Europe, the Americas, Asia, and Africa, serving consumers across more than 160 countries.
How the Company Makes MoneyPernod Ricard generates revenue primarily through the production, marketing, and distribution of its wide range of premium alcoholic beverages. The company's key revenue streams include the sale of spirits like whiskey, vodka, rum, gin, and tequila, as well as wines and champagne. Pernod Ricard leverages its extensive global distribution network and strategic partnerships with local distributors and retailers to ensure its products reach a broad customer base. The company also engages in targeted marketing campaigns and brand innovations to enhance brand visibility and consumer engagement. Additionally, Pernod Ricard's premiumization strategy focuses on increasing sales of higher-margin products, thus boosting profitability. The company's earnings are influenced by factors such as global economic conditions, consumer trends, and changes in regulations related to alcohol sales and distribution.

Pernod Ricard Earnings Call Summary

Earnings Call Date:Feb 06, 2025
(Q1-2025)
|
% Change Since: 0.43%|
Next Earnings Date:Aug 28, 2025
Earnings Call Sentiment Neutral
The earnings call presented a challenging start to the fiscal year with notable declines in key markets like China and the U.S., offset by strong performances in other regions and operational efficiency efforts. The sentiment is cautiously optimistic about a gradual improvement in key markets, but overall, the challenges faced indicate a neutral sentiment.
Q1-2025 Updates
Positive Updates
Strong Market Performance
Despite overall challenges, the company achieved market share gains in over 70% of its main markets, including Japan, Canada, Poland, Brazil, Turkey, Nigeria, and strong travel retail performances in the Americas and Europe.
Solid Growth in India
India reported a solid sales growth of 2%, with expectations for strong growth in the full year, driven by double-digit growth on Jameson and Seagram whiskeys, Royal Stag, and Blenders Pride.
Global Travel Retail Growth
Global travel retail saw strong growth of 3% in all regions except Asia, with good performance for Absolut, Jameson, and Ballantine’s.
Operational Efficiencies
Emphasis on operational efficiencies, including production efficiency initiatives and marketing improvements, to sustain operating margin and adapt to challenging environments.
Negative Updates
Overall Sales Decline
The company reported a 5.9% decline in organic net sales for Q1 FY’25, with a reported decline of 8.5%.
Significant Decline in China
China experienced a sharp sales decline of 26% due to a challenging macroeconomic environment and weak consumer demand.
U.S. Market Challenges
The U.S. market saw a 10% decline, with inventory adjustments and strong promotional intensity impacting net sales.
Adverse Weather Impact in Europe
Adverse weather conditions over the summer negatively affected market performance in Europe.
Negative Price Mix
Price mix was at minus 6% in Q1, mainly due to negative market mix in the U.S. and China.
Company Guidance
In the recent Q1 FY'25 sales call, the company reported a 5.9% decline in organic net sales, or 8.5% on a reported basis, with a 5% decline excluding Russia. The company highlighted several key metrics: the U.S. experienced a 10% decline, India saw a 2% growth despite sales phasing, and China faced a significant 26% sales decline due to weak consumer demand and tariffs. Global travel retail grew by 3%, with strong performances in Japan, Canada, and Brazil among others. The company expects modest growth for the full year, with a focus on sustaining operating margins through operational efficiencies and strict cost discipline. The pricing environment remains challenging, particularly in the U.S. and China, but the company maintains confidence in its long-term strategy.

Pernod Ricard Financial Statement Overview

Summary
Pernod Ricard demonstrates a solid financial foundation with strong gross margins and effective cash conversion. However, recent declines in revenue, net income, and free cash flow growth present challenges that need addressing. The company shows resilience in maintaining a healthy equity base despite these pressures.
Income Statement
65
Positive
Pernod Ricard's revenue has shown some volatility, with a noticeable decline in the most recent year. Net profit margin decreased significantly from the previous year, indicating potential challenges in cost management or pricing. Despite this, gross profit margins remain robust, reflecting strong production efficiency.
Balance Sheet
70
Positive
The company maintains a stable equity base with a moderate debt-to-equity ratio, suggesting a balanced approach to leveraging. Return on Equity has decreased, reflecting lower net income relative to equity. The equity ratio is healthy, indicating a solid financial foundation.
Cash Flow
60
Neutral
Free cash flow has declined, indicating pressure on cash generation. The operating cash flow to net income ratio is strong, suggesting effective cash conversion from earnings. However, the decrease in free cash flow growth rate could signal challenges in sustaining investment or operational flexibility.
BreakdownJun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income Statement
Total Revenue11.60B12.14B10.70B8.82B8.45B
Gross Profit6.97B7.25B6.47B5.29B5.09B
EBITDA3.19B3.75B3.33B2.63B1.32B
Net Income1.48B2.26B2.00B1.30B329.00M
Balance Sheet
Total Assets39.19B37.68B36.01B32.15B31.52B
Cash, Cash Equivalents and Short-Term Investments2.68B1.61B2.53B2.08B1.94B
Total Debt13.62B11.87B11.17B9.60B10.41B
Total Liabilities22.39B20.96B19.76B17.07B17.31B
Stockholders Equity15.75B15.72B15.94B14.83B13.97B
Cash Flow
Free Cash Flow954.00M1.33B1.79B1.57B816.00M
Operating Cash Flow1.73B2.03B2.29B2.00B1.18B
Investing Cash Flow-676.00M-1.73B-1.20B-486.00M-936.00M
Financing Cash Flow-209.00M-1.12B-683.00M-1.41B795.00M

Pernod Ricard Technical Analysis

Technical Analysis Sentiment
Negative
Last Price21.03
Price Trends
50DMA
20.80
Negative
100DMA
20.72
Positive
200DMA
21.57
Negative
Market Momentum
MACD
0.13
Positive
RSI
44.46
Neutral
STOCH
1.41
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 21.03 is below the 20-day moving average (MA) of 21.68, above the 50-day MA of 20.80, and below the 200-day MA of 21.57, indicating a bearish trend. The MACD of 0.13 indicates Positive momentum. The RSI at 44.46 is Neutral, neither overbought nor oversold. The STOCH value of 1.41 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

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
72
Outperform
$14.27B16.5123.14%3.12%-4.90%-14.49%
69
Neutral
$56.27B23.0735.83%4.25%-1.21%-8.89%
69
Neutral
$0.009.577.79%3.78%-5.17%-0.74%
68
Neutral
$30.08B49.10-5.05%2.38%-0.47%-117.62%
66
Neutral
$35.39B13.4815.08%2.01%-0.79%-10.83%
65
Neutral
$26.63B22.266.78%4.37%-3.63%-45.78%
63
Neutral
$20.31B12.53-7.33%3.14%2.97%-12.13%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PRNDY
Pernod Ricard
21.03
-4.81
-18.61%
STZ
Constellation Brands
170.65
-61.13
-26.37%
DEO
Diageo
101.70
-16.41
-13.89%
TAP
Molson Coors
49.22
-1.23
-2.44%
BF.B
Brown-Forman B
30.34
-13.48
-30.76%
ABEV
Ambev SA
2.21
0.12
5.74%
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.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower 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.

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.Date of analysis: Jul 31, 2025