Pernod Ricard leads the CAC, analysts more confident

(CercleFinance.com) - Pernod Ricard shares led the CAC 40 index on the Paris Bourse on Thursday, with the wine and spirits group benefiting from the increased confidence of some analysts.


At 4:20 pm, the share price had risen for the fourth time, gaining 2.2%, while at the same time the CAC index was up 0.5%. The stock has recovered more than 5% since the start of the week.

In a note published this morning, analysts at Bank of America consider that the prospect of a Chinese market that will remain complicated for a longer period than expected is now well integrated into the stock's valuation.

While BofA's teams acknowledge that the recovery of business in the United States is also proving to be very gradual, they stress that 70% of the Group's activities are currently in good shape.

Against this backdrop, the American bank predicts a gradual resumption of growth this year, with the prospect of growth of over 6% in Ebit and 8% in earnings per share (EPS) in the medium term.

Pointing out that stock market valuation is currently at ten-year lows (with a 7% discount to the consumer sector) - which in its view more than reflects current problems - BofA nonetheless acknowledges that improved visibility will be needed before a recovery can get underway.

The bank maintains a Buy recommendation on the stock, with a price target of 146 euros.

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