Analysts at the investment bank Merrill Lynch have initiated coverage of the Italian drinks company Davide Campari-Milano SpA with a 'neutral' rating.

The US broker set a €47.5 fair value to the stock.

Merrill said it still sees the spirits sector as over-valued, though it added that it sees little reason for Campari to trade at a discount to its peers.

Indeed, its analyst said that Campari can outperform the sector, due to its "focused, outperforming brand portfolio, managed by an impressively focused management team".

There was, however, an ongoing acquisition risk as Campari seeks new brand opportunities, the bank said.