On Wednesday, Deutsche Bank (ETR:DBKGn) adjusted its outlook on Pernod Ricard (EPA:PERP) SA shares (RI:FP) (OTC: PDRDY), a leading spirits company, by lowering its price target to €129.00 from the previous €133.00. The firm maintained its Hold rating on the stock, indicating a neutral stance towards the company's investment prospects.
The revision in the price target follows insights gathered from Deutsche Bank's proprietary dbDIG consumer survey. The survey, which included 3,000 participants across the United States and Europe, revealed that a significant number of consumers have higher levels of spirits inventory at home compared to pre-COVID times.
Specifically, 32% of respondents reported that their at-home spirits inventory exceeds the levels seen before the pandemic.
The survey's findings suggest that these elevated inventory levels have remained relatively unchanged from February through May. This stability indicates that consumers are not actively reducing their stockpiles of spirits at home, which could be a factor in the observed weak market offtake data.
Deutsche Bank's analysis points to the possibility that the sluggish market performance is likely a result of decreased consumption rather than changes in purchasing behavior. The Hold rating suggests that while the firm sees potential risks, it does not necessarily advise against investing in Pernod Ricard's shares at the current time.
Pernod Ricard, known for its portfolio of premium alcohol brands, has been navigating the shifting landscape of consumer habits post-pandemic. The company's stock price and future performance are closely watched by investors seeking to understand the broader trends in the beverage industry.
In other recent news, Pernod Ricard SA has faced a reduction in its stock's price target by HSBC (LON:HSBA) from EUR140.00 to EUR138.00 due to slower than anticipated recovery in the United States market.
Despite the adjustment in the price target, the firm has retained its Reduce rating on the shares of the French spirits company. HSBC's adjustment comes after revising the company's FY24 Americas organic sales growth forecast down to -6.0%, based on ongoing inventory adjustments in the US during the third quarter.
Furthermore, HSBC has also revised its projection for Pernod Ricard's overall FY organic sales growth from -0.4% to -0.8%. These revisions have impacted the firm's discounted cash flow (DCF) target price, leading to the new target of EUR138.00.
HSBC's outlook for Pernod Ricard is cautious, expecting further pressure on consensus estimates in the coming months. These are the recent developments concerning Pernod Ricard.
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