DB divides 'fizz from fizzle' of European beverages in 2023

Royal Unibrew A/S

12/01/2023 13:56

** Despite beverage companies' defensive traits, history
suggests they are unlikely to weather a recession without
pressure on demand, Deutsche Bank says
    ** The broker says downtrading might have already begun for
spirits in the U.S. and Europe, and while beer and soft drinks
are more resilient, they aren't entirely immune
    ** Input cost relief should benefit beer, and there is scope
for structurally higher profits as beer price increases rarely
reverse, DB says
    ** Distillers, on the other hand, have faced less severe
headwinds and therefore are less likely to benefit from input
cost relief, it adds
    ** DB cuts AB Inbev  ABI.BR  and Remy Cointreau  RCOP.PA  to
"hold" from "buy"; Pernod Ricard  PERP.PA , Fevertree Drinks
 FEVR.L  and Royal Unibrew  RBREW.CO  to "sell" from "hold"
    ** With high price growth YoY and high consumer penetration,
Heineken  HEIN.AS  is the broker's top pick with a "buy" rating
    ** It also keeps "buy" on Carlsberg  CARLb.CO , Coca-Cola
Europacific Partners  CCEPC.L , Coca Cola HBC  CCH.L  and
Campari  CPRI.MI , while Diageo  DGE.L  stays at "sell"
 (Reporting by Jacob Rasmussen)
 ((jacob.rasmussen@thomsonreuters.com))