Remy Cointreau: Weakness in Major Markets Overpowers Shoots of Improvement

Narrow-moat Remy Cointreau reported its third-quarter trading update for fiscal 2025, which aligned with our estimates. The environment remains challenging, with inventory destocking in the US and persistent weakness in China. Management confirmed its fiscal 2025 outlook, which is in line with our model. Despite the slowdown, we continue to hold our thesis that Remy has an attractive runway for growth as key markets undergo premiumization. The firm reiterated its 2030 targets of 72% gross margin and 33% operating margin. With this, we maintain our EUR 119 fair value estimate and view shares as undervalued. We expect a recovery in the second half of fiscal 2026 followed by mid-single-digit growth in fiscal 2027 and beyond.