Campari: share price falls after RBC downgrade

(CercleFinance.com) - Shares in Italian spirits group Campari were among the biggest losers on the MIB index on the Milan Stock Exchange on Thursday, penalised by a recommendation downgrade from RBC.


Analysts at the Canadian bank downgraded the stock to 'underperform' from 'sector perform', with a target price reduced from E9.4 to E8.2.

"There's a lot going on at Campari and we are increasingly concerned", Royal Bank of Canada says.

Analysts cite the growing volatility of results (three of the last four quarters have been disappointing, in their opinion), the forthcoming departure of a CEO who is highly regarded by the market, and a major acquisition in the complicated cognac market.

Given the weakness of the Courvoisier brand, as well as the destocking and promotions affecting the sector, RBC considers the operation to present a "considerable" risk, leading it to rule out any value creation through the acquisition.

"Despite this, the shares have outperformed spirits peers", notes the bank, which consequently prefers to downgrade it.

At noon, Campari shares were down over 2%, the third biggest fall on the Milan Stock Exchange's MIB index.


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