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Remy Cointreau

RCO: XPAR (FRA)
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Morningstar Rating for Stocks Fair Value Economic Moat Capital Allocation
€626.00MdkhhbhSzswtmr

Strong Growth and Near-Term Margin Headwinds Offset as We Maintain Our Fair Value Estimate for Remy

Remy Cointreau posted strong fiscal second-quarter earnings, with EUR 645 million in sales marking a 52% improvement from the year-ago period (excluding acquisitions and currency effects). Strength was broad geographically and across portfolio brands, with cognacs, liqueurs and spirits, and sales through affiliate channels up in the high-20% range (26.90% consolidated) against precoronavirus figures. We anticipate modestly increasing our top-line forecasts and slightly lowering near-term margins (due to elevated marketing spending and persistent supply chain pressures), though our long-term forecasts for high-single-digit revenue growth beyond fiscal 2022 and strengthening margins (to nearly 30% in 2026) remain largely intact. We expect to maintain our EUR 143 fair value estimate, leaving shares expensive at current prices.

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