Is Rémy Cointreau SA (EPA:RCO) An Industry Laggard Or Leader?
Rémy Cointreau SA (ENXTPA:RCO), a €6.43B mid-cap, operates in the consumer staples sector, which is facing changes in demographics and purchasing behaviours forcing beverage companies to adapt to new trends. Consumer staple analysts are forecasting for the entire industry, negative growth in the upcoming year , and a strong near-term growth of 12.97% over the next couple of years. However, this rate came in below the growth rate of the FR stock market as a whole. Today, I’ll take you through the sector growth expectations, as well as evaluate whether Rémy Cointreau is lagging or leading in the industry. Check out our latest analysis for Rémy Cointreau
What’s the catalyst for Rémy Cointreau’s sector growth?
The beverage industry is reshaping itself, avoiding traditional sugary drinks and mass-market tactics for approaches that are more focused on health and personalized customer interaction. Players in the industry are tracking these changes more closer than ever to gauge consumer preferences so they can remain ahead of these trends. Over the past year, the industry saw growth in the teens, beating the FR market growth of 13.16%. Rémy Cointreau leads the pack with its impressive earnings growth of 21.17% over the past year. Furthermore, analysts are expecting this trend of above-industry growth to continue, with Rémy Cointreau poised to deliver a 14.65% growth over the next couple of years compared to the industry’s -1.98%.
Is Rémy Cointreau and the sector relatively cheap?
The beverage industry is trading at a PE ratio of 24.04x, higher than the rest of the FR stock market PE of 18.53x. This illustrates a somewhat overpriced sector compared to the rest of the market. However, the industry returned a similar 9.58% on equities compared to the market’s 10.84%. On the stock-level, Rémy Cointreau is trading at a higher PE ratio of 46.09x, making it more expensive than the average beverage stock. In terms of returns, Rémy Cointreau generated 10.37% in the past year, in-line with its industry average.
Next Steps:
Rémy Cointreau’s industry-beating future is a positive for shareholders, indicating they’ve backed a fast-growing horse. However, this higher growth prospect is also reflected in the company’s price, suggested by its higher PE ratio relative to its peers. If Rémy Cointreau has been on your watchlist for a while, now may not be the best time to enter into the stock since it is trading at a higher valuation compared to other beverage companies. However, before you make a decision on the stock, I suggest you look at Rémy Cointreau’s fundamentals in order to build a holistic investment thesis.
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Historical Track Record: What has RCO’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Rémy Cointreau? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
