UK: Campari rating cut ahead of FY results
Davide Campari-Milano has had its rating lowered but its target price raised.
Dresdner Kleinwort Wasserstein has shifted its coverage of the Italian wine and spirits group to 'hold' from 'buy,' while upping its price target to EUR7.15. The target increase reflects a re-rating of the drinks sector.
The broker said in a note today (8 March) that it is expecting a strong recovery in the company's flagship Campari brand and a positive performance in Europe led by strong growth in Germany.
DKW added that it continued to believe in Campari's business model of achieving good organic growth as well as external growth from acquisitions.
At the end of last year, Campari bought Glen Grant from Pernod Ricard for EUR115m (US$137m) and Old Smuggler and Braemar Scotch brands for EUR15m. Pernod was asked to sell the brands by the European Commission following its takeover of Allied Domecq.
DKW also said that Campari has an excellent track record in turning around acquired brands, adding that it believes in the management's ability to extract good growth in the niche areas that the company operates in.
Campari is due to issue full-year results on 22 March. For the first nine months of 2005, sales were up 3.3% on the year, reaching EUR543.3m. Trading profit for the period was up by 3.1% to EUR158.6m, while EBITDA increased by 5.8% to EUR135.9m.
Todays press reports into Pernod and Fortune's hopes to buy Allied Domecq warn of possible conflicts and set a date for completion....
Allied Domecq has added a new flavour to its Malibu range. The company said yesterday that it would be launching Malibu Passion Fruit in the US from April 15....
Pernod Ricard and Fortune Brands are considering a US$13 billion bid for Allied Domecq, the world's second-largest spirits company. Were it to take place, Pernod and Fortune would split Allied's brand...
Pernod Ricard and Fortune Brands are hoping to buy Allied Domecq for around 670p per share, according to press reports....
Citigroup Smith Barney has initiated coverage of Davide Campari-Milano....
The US consumer goods group Fortune Brands has confirmed it is in talks about launching a joint bid with Pernod Ricard for Allied Domecq....
Fideuram Wargny has upgraded its rating of Pernod Ricard to 'buy' from 'hold'. Its analysts argue that the merger talks with Allied Domecq is a catalyst for share growth....
The Pernod Ricard brand Jacob's Creek is launching its Riesling varietal on the US market this June....
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