PERNOD RICARD

Analysis of Pernod Ricard share price

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Among the French companies found in the list of companies in the CAC 40 index, there is a company related to the alcohol sales sector, Pernod Ricard. Its stock market share is accessible to traders who wish to invest in its price. Here you can check out more about this company and its stock market share to analyse its share price.

Elements that can influence the price of this asset:

Analysis N°1

First of all, it's essential to discern the seasonal nature of the sales made by the group and take them into account when taking your position. We know that Pernod-Ricard carries out more than two thirds of its activities in the first half of the year, i.e. between July and December and more than a quarter during the month of December alone.

Analysis N°2

The Pernod-Ricard share is also particularly sensitive to the forecasts and comments made by its main competitors especially by the directors of Diaego and Remy Cointreau.

Analysis N°3

You'll also need to carefully monitor the evolution of the parities which often has a very strong impact on the profits made by the group. You should of course keep a close eye on the achievement of medium-term objectives, in particular sales growth and the increase in operating margin.

Analysis N°4

As the Pernod-Ricard group makes numerous large-scale organizational and promotional investments to promote its innovations, in its priority markets such as the United States, it's important to check the profitability of these costs and the impact of these interventions on the sales.

Analysis N°5

Essentially, you'll need to monitor the achievement of the objectives set directly by the group, with a positive development in sales in the United States and India, better positioning on the Chinese market and the results of Absolut and Chivas products.

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General presentation of Pernod Ricard

The Pernod Ricard group is currently one of the world leaders in the production and sale of wines and spirits. It owes its success to very large alcohol brands such as Absolut, Ricard, Ballantine's Whiskeys, Chivas Regal, Royal Salute, Jameson, Havana or the Mumm and Perrier-Jouët champagnes.

With a global workforce of 18,523 employees, Pernod Ricard is present worldwide.

Analysis of Pernod Ricard share price
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The major competitors of Pernod Ricard

Check out the main current competitors of the Pernod Ricard group that you should include in your analyses, taking into account their most important and influential news and publications:

Diageo

This English company specializes in the alcoholic beverage sector. It's the largest company worldwide on the liquor and spirits market and was created by the merger between Grand Metropolitan and Guinness Plc.

Brown-Forman Corporation

Also a direct competitor and one of the largest US companies in the alcohol business. With nearly 3,350 employees, the company is listed on the New York Stock Exchange.

Bacardi

This Company specializing in spirits and in the production of rum in particular is based in Cuba and has its headquarters in the United States. It's also the largest family business in this spirits industry.

Fortune Brands

Finally, this American holding company is the last direct competitor of Pernod-Ricard. Established in 1969 under the name American Brands before being renamed in 2011. This company was, for a time, listed on the NYSE.


The major partners of Pernod Ricard

Rabbit Hole Whiskey

In 2019, through its New Brand Ventures division in the USA, Pernod Ricard announced a majority stake in Rabbit Hole whiskey, whose production headquarters are based in Louisville, Kentucky.

Erasmus

Also in 2019, Pernod Ricard renewed its partnership with the Erasmus Student Network aimed at continuing its commitment to responsible consumption and fighting binge drinking among young Europeans. The objective here is to make students aware of the importance of responsible consumption and to reduce alcohol-related accidents in student evenings.

Jumia

Again in 2019, Pernod Ricard also strengthened its existing partnership with the Jumia e-commerce platform in order to continue to offer its products there. Thanks to this strengthened partnership, Pernod-Ricard will be able to offer its portfolio of premium brands to a greater number of consumers in Africa. The group announced its investment in this African e-commerce website in a press release, becoming a strategic shareholder of the company. This partnership between the two companies has existed since 2016.

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The factors in favour of a rise in the Pernod Ricard share price:

The first advantage of the Pernod-Ricard share is, of course, the very privileged positioning of this group in its sector of activity and internationally. Indeed, in the very specific field of wines and spirits, the group shares the leading position with the Diaego group, which gives it a certain stability in relation to its competitors and a strong reputation.

The Pernod-Ricard group is particularly well positioned in certain specific areas such as white spirits and rum with 38% of volumes, for which it is currently the world leader. Next come whiskies with 36% of volumes, for which it is number two in the world, and liqueurs with 20% of volumes, for which it is also number two in the world. It is also worth noting that the group ranks third in the world for cognacs and brandies, also third for bitters and is the international leader in the aniseed category.

Geographically speaking, the Pernod-Ricard group also shows a certain balance with activities well distributed between the European market, the American market (North and South America) and the Asian market with the rest of the world. It therefore has little exposure to local economic risks.

In recent years, the Pernod-Ricard group has implemented a new strategy based on upgrading its products.

Pernod-Ricard also benefits from a low level of dependence on household consumption.

The Pernod-Ricard group has always been able to impose its price level on its consumer customers because of its premium positioning and the low level of competition on some of its flagship products. As a result, investors benefit from good visibility in terms of increased profits and the group can guarantee the preservation of its margins in the future.

For some time now, Pernod-Ricard has of course benefited from the end of the US embargo on Cuba. The group, which is present in this country with its Havana Club brand, thus has the opportunity to target the US market, which is currently the third largest rum market in the world.

Finally, we also note of course the strength provided by the financial structure of Pernod-Ricard, which is particularly healthy. The cash flow generated by the group's activity very easily reaches one billion euros.

The factors in favour of a drop in the Pernod Ricard share price:

Firstly, the nature of the sector in which Pernod-Ricard operates must be taken into account. Indeed, with a significant increase in alcohol consumption among young people in recent years, the group is faced with an image risk that it will have to learn to circumvent.

On the other hand, while the group was banking on organic growth in sales, this recovery appears to be more delicate than expected, in particular because of certain uncertainties arising from the European market, as with the French market, which accounts for more than 8% of sales. Elsewhere in the world, this growth is being hampered by a drop in revenues in China. Asia in general is the direct source of some of the Group's financial difficulties, largely due to China, which has been experiencing difficulties for the past four years and a significant drop in sales and margins in India, a market that accounts for more than 10% of the Group's sales.

As a result, the prospects for growth and development are considered a little too weak by investors, who are losing interest in this stock in favour of more promising securities. Finally, Pernod-Ricard shares are suffering from a rather low yield that is finally discouraging the most hesitant buyers.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions.

Frequently Asked Questions

What are the latest figures published by Pernod Ricard?

If you would like to make a financial analysis of Pernod Ricard before trading its shares online, here are its latest results. For the 2019 financial year, the group reported sales of €9,182 million. Net profit was €1,455 million. Finally, it should be noted that the company's market capitalisation in 2020 was €41,843 million.

What financial information should be studied to analyse the Pernod Ricard share?

As you are no doubt aware, financial analysis of Pernod Ricard is one of the elements that you must include in your fundamental analysis of this stock. Among the important elements to be studied in this regard are, in particular, the dividends paid and their evolution, the minutes of the group's general meeting, regulated information or information on debt and, of course, the annual and quarterly financial statements.

How was Pernod Ricard created?

The Pernod Ricard Group was created in December 1975 through the merger of two companies, Pernod, which had existed since 1805, and Ricard, which had existed since 1932. These two brands were both aniseed aperitif brands. The group then underwent strong external growth and subsequently made numerous acquisitions, mainly in the field of alcoholic and non-alcoholic beverages.

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