March 21, 2024
Top 10 Stock Pernod Ricard Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Pernod Ricard – Top 10 Stock in Cotation Assistée en Continu Index CAC 40
Pernod Ricard is listed as a top 10 stock on March 21, 2024 in the market index CAC 40 because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is safely financed, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 27 (27% performer), Obermatt assesses an overall hold recommendation for Pernod Ricard on March 21, 2024.
Snapshot: Obermatt Ranks
| Country | France |
| Industry | Distillers & Vintners |
| Index | EURO STOXX 50, CAC 40, CAC All, SBF 120, Diversity Europe, Recycling |
| Size class | X-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Pernod Ricard Hold
| 360 METRICS | March 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 43 |
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| GROWTH | ||||||||
| GROWTH | 10 |
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| SAFETY | ||||||||
| SAFETY | 60 |
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| SENTIMENT | ||||||||
| SENTIMENT | 47 |
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| 360° VIEW | ||||||||
| 360° VIEW | 27 |
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ANALYSIS: With an Obermatt 360° View of 27 (better than 27% compared with alternatives), overall professional sentiment and financial characteristics for the stock Pernod Ricard are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four metrics below average for Pernod Ricard. The only rank that is above average is the consolidated Safety Rank at 60, which means that the company has a financing structure that is safer than those of 60% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the Value, Growth and Sentiment Ranks are all below average. The consolidated Value Rank has a less desirable rank of 43, which means that the share price of Pernod Ricard is on the high side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 10, which implies that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. Finally, the consolidated Sentiment Rank is also low at a rank of 47, which means that professional investors are more pessimistic about the stock than for 53% of alternative investment opportunities. While Safety is strong, it’s not the most critical indicator, so we suggest proceeding with caution if you are considering this stock. ...read more
RECOMMENDATION: With a consolidated 360° View of 27, Pernod Ricard is worse than 73% of all alternative stock investment opportunities based on the Obermatt Method. As only the financing structure, namely the Safety Rank, is on the safer side and all other consolidated Obermatt Ranks are below-average, this is a riskier stock investment proposition. This is especially the case, since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 47. The negative market view on Pernod Ricard may be the high stock price (low value) or the low level of growth. This is a problem. As the Safety Rank is the least significant of the four consolidated Obermatt Ranks, we cannot identify enough positive facts that are visible today to make a case for this stock investment. The company may have a strong future which would justify the high stock price, but this is not visible from investor behavior today. As market sentiment is critical, you should be careful with paying more than market-average for this stock, and conduct further research into the company's future growth potential. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more
Sentiment Strategy: Professional Market Sentiment for Pernod Ricard only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 47 (better than 47% compared with alternatives), overall professional sentiment and engagement for the stock Pernod Ricard is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and half above average for Pernod Ricard. Analyst Opinions are at a rank of 32 (worse than 68% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 34, which means that stock research experts are getting even more pessimistic. In addition, the Professional Investors rank is 32, which means that professional investors hold less stock in this company than in 68% of alternative investment opportunities. Pros tend to invest in other companies. The only positive sentiment indicator for Pernod Ricard is Market Pulse, with a rank of 87, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 87% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 47 (less encouraging than 53% compared with investment alternatives), Pernod Ricard has a reputation among professional investors that is below that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: Pernod Ricard Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 43 (worse than 57% compared with alternatives), Pernod Ricard shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Pernod Ricard. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 56% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 14 which means that the stock price compared with what market professionals expect for future profits is higher than 86% of comparable companies, indicating a low value concerning Pernod Ricard's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 42 which means that the stock price compared with what market professionals expect for future profit levels is higher than 58% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 49 is also low. Compared with invested capital, the stock price is higher than for 51% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 43, is a hold recommendation based on Pernod Ricard's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Pernod Ricard? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Pernod Ricard only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Pernod Ricard Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 10 (better than 10% compared with alternatives), Pernod Ricard shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below-average for Pernod Ricard. While Sales Growth ranks at 64, professionals currently expect the company to grow more than 64% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 17, which means that, currently, professionals expect the company to grow its profits less than 83% of its competitors, and Capital Growth has a low rank of 41. Historic stock returns were also below average with a current Stock Returns rank of 11 which means that the stock returns have recently been below 89% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 10, is a sell recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. ...read more
Safety Strategy: Pernod Ricard Debt Financing Safety above-average
| SAFETY METRICS | March 21, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 41 |
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| REFINANCING | ||||||||
| REFINANCING | 65 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 69 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 60 |
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ANALYSIS: With an Obermatt Safety Rank of 60 (better than 60% compared with alternatives), the company Pernod Ricard has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Pernod Ricard is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Pernod Ricard. Refinancing is at 65, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 65% of its competitors. Liquidity is also good at 69, meaning the company generates more profit to service its debt than 69% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 41, which means the company has an above-average debt-to-equity ratio. It has more debt than 59% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 60 (better than 60% compared with alternatives), Pernod Ricard has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Pernod Ricard could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Pernod Ricard Lowest Financial Performance
| COMBINED PERFORMANCE | March 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 43 |
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| GROWTH | ||||||||
| GROWTH | 10 |
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| SAFETY | ||||||||
| SAFETY | 69 |
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| COMBINED | ||||||||
| COMBINED | 23 |
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ANALYSIS: With an Obermatt Combined Rank of 23 (worse than 77% compared with investment alternatives), Pernod Ricard (Distillers & Vintners, France) shares have lower financial characteristics compared with similar stocks. Shares of Pernod Ricard are low in value (priced high) with a consolidated Value Rank of 43 (worse than 57% of alternatives) and show below-average growth (Growth Rank of 10) but are safely financed (Safety Rank of 60), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 23, is a sell recommendation based on Pernod Ricard's financial characteristics. As the company Pernod Ricard's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 43) and low growth (Obermatt Growth Rank of 10), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 60) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more
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