Pernod Ricard: Near 52-Week Low After FY23 Results

Company Update (RI FP) (Buy)

Highlights

• FY23 organic growth was 10% in sales in 11% in EBIT

• Quarterly growth rates are volatile due to prior-year events

• U.S. and China to see declines in Q1 but growth in FY24

• Shares have a 20x P/E and a 2.6% Dividend Yield

• At €181.65, we see a 63% total return (19.3% p.a.). Buy

Introduction

Pernod Ricard ("PR") reported FY23 results on Thursday (August 31). PR shares finished the day down 6.4%, and those of peers Diageo and Rémy Cointreau also fell (by 2.6% and 3.9% respectively). After recovering 0.3% on Friday, PR shares are now down around 2% for the past year and only 6% above their 52-week low:

PR Share Price (Last 1 Year)

Source: Google Finance (01-Sep-23).

We have been following PR and other Spirits stocks for the past few years, and first published our research on PR online in August 2019. Our current Buy rating dated back to an upgrade in March 2022, and at present PR shares are roughly flat since then (after dividends).

Pernod Ricard shares are at 20x FY23 earnings. Headline resul…