Campari: shares up as Berenberg raises target after results

(CercleFinance.com) - Shares in Campari are up 1.
8% at 7.6 euros this morning, outperforming the FTSE MIB index which is down 1.3%, with broker Berenberg raising its target price for the Italian spirits group from 7.4 euros to 8.3 euros, reinstating its "buy" rating on the stock after "outstanding" interim results.

The broker says that much of the enthusiasm that followed the report has been tamed by the gross margin guidance, which was not upgraded despite strong top-line growth.

"We understand the short-term frustration of gross margin expansion being held back by the big rise in agave prices (a key input for tequila) in 2018," Berenberg says in a preview note.

However, for the broker this misses a more important point: the US-led acceleration in the growth of Aperol and the implications that this has for the group's top-line growth and margins over the medium term.



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