Kepler Chevreux says beverage firms to reach pre-COVID margins by 2025

Royal Unibrew A/S

05/10/2023 09:59

** Growing sales and falling input costs are the right mix
for beverage companies to return to pre-pandemic margins, Kepler
Chevreux says as it upgrades Pernod Ricard  PERP.PA , Heineken
 HEIN.AS  and Carlsberg  CARLb.CO 
    ** It raises Pernod Ricard and Carlsberg to "hold" from
"reduce", and Heineken to "buy" from "hold"
    ** "Various commodity prices peaked in 2022 and have come
down since," the broker says, adding brewers could "benefit the
most and the earliest from lower input costs"
    ** It sees average EBIT margin for the sector closing in on
2018-2019 pre-pandemic levels by 2025
    ** For Heineken, Kepler Chevreux points to potential margin
upside in 2024 due to lower costs and a stronger performance in
the Vietnamese market
    ** It cites recent decline in share prices for Pernod Ricard
and Carlsberg upgrades
    ** The broker cuts Britvic to "hold" from "buy" on
"balanced" valuation, expecting "modest operating margin
improvements in the next few years"
    ** It maintains "buy" for AB InBev  ABI.BR , Campari
 CPRI.MI , Lucas Bols  BOLS.AS  and Royal Unibrew  RBREW.CO ,
and "hold" for Coca-Cola Europacific Partners  CCEPC.L , Diageo
 DGE.L  and Remy Cointreau  RCOP.PA 


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