DEO - Pernod Ricard: Don't Panic On 1% FYQ1 Organic Growth; Reiterate Buy

Introduction

Pernod Ricard (OTCPK:PDRDF) (referred here as "PR") share price has declined 8.4% since its recent peak on 7th October, including a 4.4% decline since the FY20Q1 trading update on 17th October. This brings shares to approx. 2% below the level (€162.45) at which we first recommended them in August ("Pernod Ricard: Long-Term Emerging Market Compounder"):

While the FY20Q1 update (for the quarter ending 30th September) did contain some negative headlines, our Buy case remains intact, as explained below.

Buy Case Recap

Our original Buy case predicted a 6-10% annual return