On Wednesday, CFRA initiated coverage on Davide Campari-Milano S.p.A. (CPRI:IM) (OTC: DVDCY (OTC:DVDCY)) shares with a Hold rating and set a price target of €8.00. The firm based its target on a 2025 price-to-earnings (P/E) ratio of 21.1 times, which is above the industry's forward average of 18.3 times. The rating reflects the company's consistent growth, driven by its globally recognized brands.
CFRA predicts earnings per share (EPS) for Davide Campari (LON:0ROY) to be €0.33 in 2024 and €0.38 in 2025. Revenue is expected to increase by 6.2% in 2024, supported by steady growth in the Americas and a sequential improvement in the Europe, Middle East, and Africa (EMEA) region. This forecast aligns with the company's second-quarter organic growth of 6.9% in 2024, propelled by the popularity of its Aperol brand and other global priorities.
For the year 2025, CFRA's outlook is more optimistic, projecting a revenue growth of 9.4%. The firm anticipates the negative impact of poor weather conditions to diminish, contributing to the company's stronger performance. Nonetheless, CFRA notes that there is limited potential for margin growth in the near future. The firm expects advertising and promotional expenses to normalize around 17% of sales, compared to 15.2% in the first half of 2024, due to increased competition in the aperitifs category.
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