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Investing.com -- Rémy Cointreau (EPA:RCOP) on Friday raised the lower end of its annual guidance after the United States and European Union agreed to cut planned tariffs on European wines and spirits in half, easing pressure on the French cognac maker’s earnings.
The revised trade agreement, effective August 1, set tariffs at 15%, down from the initially proposed 30%.
Following the decision, Rémy Cointreau lowered its expected earnings hit to €30 million, compared with the earlier estimate of €45 million.
“There is no change to our view that cognac will recover over the med-term and that Remy will see recovery alongside this. Whilst visibility on timing of recovery is still low, tail risks are abating and Remy’s cognac business appears to be bottoming,” said analysts at Jefferies in a note.
The company now anticipates a mid-single-digit decline in operating profit for fiscal 2026, compared with its previous forecast of mid- to high-single-digit declines.
Jefferies said the adjustment compares to its fiscal 2026 EBIT forecast of €190 million.
About half of the €15 million relief is being reinvested into growth, primarily in the United States and China. The reduced tariff burden represents roughly 8% of fiscal 2026 EBIT.
Analysts noted that consensus estimates for the fiscal year remain unchanged. The market is projecting organic sales growth of 3.5% and an EBIT decline of 4.1%, which is in line with Jefferies’ forecast.
Shares of Rémy Cointreau closed at €54.65 in the latest session, giving the company a market capitalization of €2.8 billion ($3.3 billion).
Jefferies reiterated its “buy” rating on the stock with a price target of €70, a 28% increase from the most recent close.