First Brands Group debt targeted by Apollo Global Management - report
Investing.com - Morgan Stanley downgraded Pernod Ricard SA (EPA:RI) stock rating from Equalweight to Underweight on Wednesday, while lowering its price target to EUR85.00 from EUR90.00.
The investment bank cited substantial risks to consensus expectations for fiscal year 2026 despite the company’s recent fiscal year results exceeding expectations. Morgan Stanley projects a 2% organic sales growth decline for FY26, compared to the consensus estimate of a 0.3% decline.
The downgrade reflects inventory adjustment challenges in key markets including the US, India, and China, which collectively represent 43% of FY25 revenue. Morgan Stanley noted that Q1 2026 is likely to perform worse in organic sales growth terms than Q1 2025.
The firm also highlighted concerns about Pernod Ricard’s operating margin, projecting a 3.3% decline in organic EBIT for FY26, significantly below the consensus estimate of a 0.1% decline. This forecast implies a 35 basis point organic margin decline year-over-year.
While Pernod Ricard implemented approximately EUR450 million in cost savings during FY25, Morgan Stanley noted that savings will be "notably lower" in FY26, with an additional EUR80 million negative impact from tariffs, despite the company’s new four-year EUR1 billion cost-saving plan through 2029.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.