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Deutsche Bank reshuffled its ratings on the European beverages sector on Monday.
Following two consecutive years of underperformance, analyst Mitch Collett and team believe it is now time to be slightly less cautious on Distillers.
“Brewers outperformed Distillers in 2023 but share price performance in absolute terms and relative to Soft Drinks was disappointing. We expect 2024 to be better due a combination of easy comparators and input costs.”
The firm continues to see downside risk to consensus estimates for Pernod Ricard SA (OTCPK:PDRDF), Diageo (NYSE:DEO), and Rémy Cointreau SA (OTCPK:REMYF) – but also recognizes that the valuation gap to Brewers and Soft Drinks has narrowed. Davide Campari-Milano N.V. (OTCPK:DVDCF) remains Deutsche Bank’s top pick in spirits. Meanwhile, Anheuser-Busch InBev (BUD) was downgraded to a Hold rating from Buy following its recent rally, while Royal Unibrew A/S(OTCPK:ROYUF) was lifted to a Hold rating from Sell. Heineken (OTCQX:HEINY) remains Deutsche Bank’s top pick in beverages overall, although the Carlsberg A/S (OTCPK:CABGY) is also still slotted with a Buy rating.
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Image and article originally from seekingalpha.com. Read the original article here.