Moody’s: Diageo Set To Reduce Financial Leverage Faster Than Pernod Ricard
Moody’s Investors Service has offered an appraisal of drinks firms Diageo and Pernod Ricard, saying that the former is in a better position to reduce its financial leverage, due to "its higher profit growth, faster margin expansion, and the likely positive impact on reported earnings of the pound's continued weakness".
According to Moody’s, Diageo’s strong position in the US is also likely to prove a boost, while Pernod Ricard remains "constrained" by its China operations.
Where Pernod Ricard does outperform its rival, however, is in the higher contribution that it earns from premium products, including its "established" presence in the cognac market.
"[Diego is] slightly more exposed to uncertainties related to Brexit," Moody’s said, as a large share of its sales are to emerging markets that have trade agreements with the EU.
"The UK's post-Brexit trading agreements will affect both Diageo and Pernod because of the importance of their respective Scotch whisky businesses," Moody’s added.
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. To subscribe to ESM: The European Supermarket Magazine, click here.