The recent downward movement has sent Pernod Ricard shares back to attractive levels situated around 152.35 EUR. This zone could put an end to the downward movement and offers a good timing for new long positions.
Strengths
● The share is getting closer to its long-term support in weekly data, at EUR 153.6, which offers good timing for buyers.
● Share prices are approaching a strong support area in daily data, which offers good timing for investors.
● The company returns high margins, thereby supporting business profitability.
● Considering the small differences between the analysts' various estimates, the group's business visibility is good.
Weaknesses
● The company is in debt and has limited leeway for investment
● Financial statements have repeatedly disappointed market stakeholders. Most often, they were below expectations.
● The company's enterprise value to sales, at 4.97 times its current sales, is high.
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Pernod Ricard is the world's No. 2 in the production and marketing of Premium and Prestige spirits and wines. Net sales break down by family of products as follows:
- spirits and champagnes of strategic international brands (63.4%): Absolut (12.7 million cases sold in 2022/23), Jameson (10.7 million), Ballantine's (8.8 million), Chivas Regal (5.1 million), Malibu (4.7 million), Ricard (4.4 million), Havana Club (4.3 million), Beefeater (3.7 million), Martell (2.4 million), The Glenlivet (1.6 million), Mumm (0.6 million), Royal Salute (0.3 million) and Perrier-Jouët (0.3 million);
- local strategic brands' spirits (17.7%): Seagram's, Kahlua, Olmeca, Seagram's Gin, Ramazzotti, Imperial, Pastis 51 and Clan Campbell brands, etc.;
- speciality brand's craft spirits (6.2%): Italicus, Lillet, Pernod, Suze, Augier, Malfy, Jefferson's, Powers and Redbreast brands, etc.;
- strategic wines (3.9%): Jacob's Creek, Kenwood, Brancott Estate, Campo Viejo, Church Road, George, St Hugo, Stoneleigh, Ysios and Wyndham brands;
- other (8.8%).
At the end of June 2023, the group has 96 production sites worldwide.
Net sales are distributed geographically as follows: Europe (28.5%), Americas (28.7%) and other (42.8%).