On Thursday, Bernstein analysts adjusted their outlook on shares of Davide Campari-Milano S.p.A. (CPRI:IM) (OTC: DVDCY (OTC:DVDCY)), lowering the price target to EUR10.50 from the previous EUR10.80. Despite this adjustment, the firm maintained its Outperform rating on the company's shares. The revision comes after Campari (LON:0ROY) reported a significant underperformance in the third quarter, prompting a reassessment of future expectations.
Bernstein SocGen Group noted that the third-quarter results represented a considerable deviation from projections, leading to a recalibration of the company's outlook.
According to the analyst, the fourth-quarter results are not anticipated to offer much in terms of surprises or reassurance. Instead, the market's attention is likely to shift towards Campari's prospects for the year 2025 and beyond, as well as insights from the new CEO.
Analyst expressed confidence that Campari will eventually return to its pre-2023 growth trajectory, outpacing the sector, bolstered by its robust brand portfolio and the realization of long-awaited margin expansion. However, it is cautioned that this recovery is expected to be more pronounced in the second half of 2025, and that it would take time for the company's valuation premium to be fully restored.
The analyst also mentioned an update to their financial models, which includes a slight reduction in the target price-to-earnings (P/E) ratio to 25 times. The commentary suggests that while the road to recovery may be gradual, there is optimism about Campari's long-term potential to regain its strong market position.
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