Pernod Ricard: Strong H1 FY23 Results, Still 21x P/E
(Preview) Company Update (RI FP) (Buy)
Summary
Pernod Ricard's H1 FY23 results on Thursday were strong as we predicted, and shares finished the day up 3.4%.
Organic Net Sales growth was 11.5% globally, including 5% in the U.S.; Gross Margin rose slightly, while Operating Margin was stable.
China, India and Travel Retail should be near-term tailwinds, offsetting lower U.S. growth as it normalizes back to pre-COVID trends.
PR shares are at 20.7x CY22 EPS and have a 2.1% Dividend Yield. Buybacks are now expected to be the top of the previous range.
With shares at €195.80, we expect a total return of 49% (12.8% annualized) by June 2026. Buy.
Introduction
Pernod Ricard SA ("PR") reported H1 FY23 results on Thursday (February 16), which were strong as we predicted in our review last Friday. Pernod Ricard shares finished the day up 3.4% in Paris.
In H1 FY23, PR Net Sales grew by 11.5% organically year-on-year, including by 5% in the U.S. Organically, Gross Margin rose slightly despite cost inflation, and Operating Margin was stable year-…