The average target price of RI.PA is 104 and suggests 16% upside potential. Usually, this means a BUY recommendation among investment firms, or a recommendation to increase one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 157.0. This translates into 74% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 85.0. This is equivalent to 6% downside potential in the worst case. 

Pernod Ricard SA produces and sells wines and spirits worldwide. It offers its products under various brands. The company was founded in 1805 and is headquartered in Paris, France.

France

Pernod Ricard SA

Consumer Defensive

The company has a track record of regular dividend payments. It has paid dividends in each of the past ten years. Dividend per share (DPS) has grown yearly, and there is an evident trend. In the past 12 months, the dividend yield has been strong and significantly above its peers. At the same time, the average five-year yield has been significantly higher and exceeded most of its peers. On average, the company pays dividends twice a year. 

RI.PA reported revenue of EUR 11 184mn in the last 12 months, down 4% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 46% from FY23 to EUR 4.34. Market expects EPS to reach EUR 7.02 in FY25.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Within the past six months, its performance has trailed this peer group's by 18ppts and its growth accelerated by 11ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported good EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 25.6% in the last 12 months, a decline from 27.5% in FY24. 

Historically, RI.PA has reported strong net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 9.8%, down from 12.7% in FY24. 

Another important profitability metric, return on assets (RoA), amounted to 2.8% in the last 12 months, a decrease from 3.8% in FY24. The market analysts predict that RoA will be 3.1% in FY25, again weaker than its peers. 

In the last 12 months, the return on capital employed (RoCE) declined to 3.3%, below the peers. The consensus estimate for FY25 for RoCE is 7.0%, again behind the peers. 

Pernod Ricard SA reported a return on equity (RoE) of 6.6% in the last 12 months, down from 9.0% in FY24. The market consensus projects an RoE of 7.7% in FY25, again behind its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 1.6 in the past several years. This ratio implies a good shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

RI.PA boasts very high trading liquidity. The average private investor can sell his common position in the stock immediately. Liquidity is usually very stable and remains mildly favourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. 

No other major risks have been identified.

The risk of default is moderate. We note strong positions in its industry and robust profitability, among the positive credit factors. Among the negative credit factors, we point to slow historical revenue growth, excessive margin volatility, and poor working capital management.

In highly turbulent market conditions, RI.PA is not volatile. In other words, the stock will fall far less than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be very low. 

In normal market circumstances, RI.PA is not volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will stay within a narrow range. The stock's losses on its worst days (less than 1-5% of the time) will range from very low to negligible. 

Considering past and projected metrics, the stock is neither 'expensive' nor 'cheap' compared to its peers. In particular, the stock is reasonably priced on P/E, of fair value on EV/EBITDA, trading at neutral levels on P/FCF. 

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Pernod Ricard SA

€ 94.22

6

Pernod Ricard SA

€ 94.22

6

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

€ 94.22

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