European spirits stocks' underperformance opens opportunities, Berstein says

Heineken Holding NV

13/07/2023 11:23

** Bernstein says brewers' and spirits makers' recent
underperformance on the European stock markets offers
opportunities for investors
    ** European beverages are now "fairly valued on consensus"
but undervalued according to Bernstein's estimates, it says
    ** The broker says the sector valuation in Q2 was dragged
down by AB InBev and Rémy Cointreau, though all stocks were soft
aside from Campari  CPRI.MI  and to a lesser extent Carlsberg
 CARLb.CO 
    ** The sector can expect positive cost trends, on energy in
particular but also ocean freight and glass, Bernstein says
    ** Despite concerns about limited U.S. sales for spirits
producers, including Pernod Ricard  PERP.PA  and Diageo  DGE.L ,
the consumption level should be close to its low point, the
broker says
    ** It adds organic growth prospects for spirits are intact,
seeing upside in China as overseas tourism resumes
    ** Heineken  HEIO.AS  remains the "best long-term growth
story" among brewers, Bernstein says, despite weak performances
in the Vietnamese market

 (Reporting by Victor Goury-Laffont)
 ((Victor.goury-laffont@tr.com))