(Boursier.com) — At the top of the list, Remy Cointreau climbed 4.4% to 94 euros at the opening of the Paris market. The buying flow on the spirits group is linked to a note from Deutsche Bank which raised its recommendation on the value to ‘purchase’ with a target of 112 euros. Recent industry data suggests that the group’s annual growth could start to improve in the coming months, as growth rates compared to 2019 have started to stabilize. The broker also believes the group could be about to end a destocking period, meaning shipment growth could outpace inventory depletion growth in the near future. Finally, the broker acknowledges that China’s outlook is uncertain due to the possibility of macroeconomic pressures and anti-dumping regulations. However, the firm’s sales in China remain below trend, Cognac shipment data suggests improvement and inventory levels may have normalized.
Remy Cointreau currently trades at 3.2 times its inventory book value and 0.9 times its implied inventory value using its current gross margin. However, a detailed analysis of the stocks suggests they could be worth as much as €12.5 billion, or €234 per share, given that the company’s inventory is likely tilted toward older, more valuable liquids.
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