(CercleFinance.com) – Deutsche Bank downgraded its recommendation on Pernod Ricard shares on Monday, down from ‘buy’ to ‘hold’ with a price target reduced from 233 to 198 euros.
In a study devoted to the European mass consumption sector, the German investment bank justifies its decision by the delay taken by the spirits group in terms of advertising and promotion expenditure.
“We continue to see Pernod as one of the best positioned players in the European consumer staples market due to its attractive exposure both in terms of categories and countries,” she explains.
‘However, Pernod has maintained its advertising and promotional expenditure at generally stable levels, where groups such as Diageo, Campari and Remy have increased them in recent years’, notes Deutsche.
While he welcomes the efforts undertaken by Pernod in terms of its digital tools, the German bank points out that Diageo has also increased its digital investments recently, which leads it to fear that the French group will lose ‘shares of voice’, a ratio that compares a brand’s advertising budget to all advertising expenditure in its market.