Campari: still under pressure, the sector worries

(CercleFinance.com) - Campari shares continued to fall in Milan on Monday, shedding a further 1% after dropping 5% on Friday afternoon, following comments deemed not very reassuring regarding the health of the spirits sector.


During a conference call with investors regarding the US market, the Italian group had explained that the weakness observed in sales in H1 had persisted "a little longer than expected" in Q3.

Campari points out that these comments are based on general sales trends within its sector, but do not relate to the company's specific performance.

In a note published in the morning, analysts at Oddo BHF nonetheless refer to these "not very reassuring" comments on the sector's trend, which they feel come as no real surprise after Alexandre Ricard's recent comments.

Indeed, two weeks ago, Pernod Ricard's CEO pointed to the same trends on the publication of the group's annual results, they point out.

But for a group like Campari, these comments are somewhat unprecedented, the broker says.

Oddo points both to the Italian group's non-exposure to China and cognac, two segments currently experiencing difficulties, but also to its exposure to certain spirits categories in the USA (tequila, liqueurs & aperitifs) less penalized by destocking.

In its view, Campari could simply be caught up in the post-Covid cycle turnaround.

Oddo, which maintains its 'underperform' rating on the stock, has consequently lowered its target price for the share from E7.7 to E7.

Shortly after 2pm, Campari shares were down 1.5%, in a fairly flat FTSE MIB index.


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