S&P 500   4,071.70
DOW   34,429.88
QQQ   292.55
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Estonia to buy US rocket artillery system in $200M deal
Russia rejects $60-a-barrel cap on its oil, warns of cutoffs
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Moldova signs new energy deal that could ease blackout risk
Tennessee roads plan mulls toll lanes, electric car fee hike
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OPEC+ oil producers face uncertainty over Russian sanctions
Hess to buy $750 million in carbon credits from Guyana
S&P 500   4,071.70
DOW   34,429.88
QQQ   292.55
Get Rid of Your Siri Remote Once and for All This Year
Defy EOY Volatility with Artificial Intelligence (Ad)pixel
Estonia to buy US rocket artillery system in $200M deal
Russia rejects $60-a-barrel cap on its oil, warns of cutoffs
Defy EOY Volatility with Artificial Intelligence (Ad)pixel
Moldova signs new energy deal that could ease blackout risk
Tennessee roads plan mulls toll lanes, electric car fee hike
These 5 Tech Stocks Have 10x Potential (Ad)pixel
OPEC+ oil producers face uncertainty over Russian sanctions
Hess to buy $750 million in carbon credits from Guyana
S&P 500   4,071.70
DOW   34,429.88
QQQ   292.55
Get Rid of Your Siri Remote Once and for All This Year
Defy EOY Volatility with Artificial Intelligence (Ad)pixel
Estonia to buy US rocket artillery system in $200M deal
Russia rejects $60-a-barrel cap on its oil, warns of cutoffs
Defy EOY Volatility with Artificial Intelligence (Ad)pixel
Moldova signs new energy deal that could ease blackout risk
Tennessee roads plan mulls toll lanes, electric car fee hike
These 5 Tech Stocks Have 10x Potential (Ad)pixel
OPEC+ oil producers face uncertainty over Russian sanctions
Hess to buy $750 million in carbon credits from Guyana
S&P 500   4,071.70
DOW   34,429.88
QQQ   292.55
Get Rid of Your Siri Remote Once and for All This Year
Defy EOY Volatility with Artificial Intelligence (Ad)pixel
Estonia to buy US rocket artillery system in $200M deal
Russia rejects $60-a-barrel cap on its oil, warns of cutoffs
Defy EOY Volatility with Artificial Intelligence (Ad)pixel
Moldova signs new energy deal that could ease blackout risk
Tennessee roads plan mulls toll lanes, electric car fee hike
These 5 Tech Stocks Have 10x Potential (Ad)pixel
OPEC+ oil producers face uncertainty over Russian sanctions
Hess to buy $750 million in carbon credits from Guyana

Bank Of America Sees Upside In These 2 European Alcohol Stocks

Bank Of America Sees Upside In These 2 European Alcohol StocksA new Bank of America report cites Diageo (NYSE: DEO) and Pernod Ricard (OTC: PRNDY) as U.S.-listed alcoholic beverage companies expected to show resilience even in a weak consumer environment. 

Both stocks are showing year-to-date declines, as well as losses over shorter time frames.

Meanwhile, other companies, such as Brown-Forman (NYSE: BF.B) , Constellation Brands (NYSE: STZ) and Molson Coors (NYSE: TAP.A) are showing signs of life. 

Bank of America analysts Andrea Pistacchi and Victor Beltran-Segarra see the global alcoholic beverage industry growing sales by 5.6% in fiscal 2023, despite lower-than-expected year-to-date performance. 

They added that they expect 4.6% growth in the U.S. market.

“In Asia, China should accelerate on easy comps and potential easing of zero-tolerance Covid policy, while the rest of the region is rebounding strongly,” they wrote. 

The recovery of the travel industry should also aid in the global beverage bounce. In the U.S., the analysts pointed out, at-home alcohol spending accounts for just 1% of Americans’ total income, but adult beverages are  “a relatively ‘affordable pleasure’ for most … suggesting it will be among the last purchases consumers will sacrifice.”

Moreover, the report said, two-thirds of alcohol spending in the U.S. comes from households earning more than $75,000 per year. That could bode well for sales, if higher earners continue to spend disposable income on alcohol.


Despite the Bank of America analysts’ optimism about fiscal 2023, and the strength of the well-paid consumers, high inflation and rising energy costs may impede consumer demand for the foreseeable future. 

Double-Digit Sales Growth 

U.K.-based Diageo has increased sales at double-digit rates since March 2021, but growth has been slowing. Earnings, too, were increasing at double-digit rates, but growth was flat most recently.

Wall Street expects earnings to grow 15% in fiscal 2023, to $8.30 per share, and then another 9% in 2024, to $9.05 per share. 

According to MarketBeat data, analysts have a consensus rating of “hold” on Diageo. The stock has been correcting since January. It closed Tuesday at $174.36, up $0.52, or 0.30%. The stock gapped up earlier in the session, but reversed to close near its session low. 

It’s currently trading below key moving averages, which doesn’t bode well for investors hoping to get in just as the stock is about to make a big price move. 

Diageo owns 200 alcohol brands, sold in more than 180 countries. Brands include Johnnie Walker, Guinness, Tanqueray, Bailey’s, Smirnoff, Captain Morgan, Crown Royal and Ketel One.
Bank Of America Sees Upside In These 2 European Alcohol Stocks

Top Pick As Economies Recover

In the beverage report, Bank of America said its top pick was Pernod. Analysts cited reasons including a China and travel recovery, the company’s balance sheet and attractive valuation. Pernod has a market capitalization north of $48 billion, but as a France-based company, it’s not tracked by the S&P 500.

Pernod’s well-known brands include Jameson, Glenlivet, Chivas and Beefeater, among many others. 

Like Diageo, Pernod has also been selling off since early January. A rally attempt in April fell flat, and the stock has been selling off along with the broader global market, following the summer rally throughout equity markets. 

Earnings and sales both picked up in recent quarters, following slowdowns in 2020, as the company was clearly hit hard by Covid closures of bars, restaurants and other out-of-home venues. 

This stock, too, is underperforming the broader market, as well as languishing below longer-term price lines, such as the 50-day or 200-day, as well as shorter term averages. 

In an economic downturn, consumers often turn to lower-cost alternatives. That’s true in many product categories, including alcohol. Bank of America calls that phenomenon “trading down.” 

The Bank of America analysts said Pernod’s U.S. portfolio “should be relatively shielded from trading down, except for a few smaller brands. The main growth drivers have limited exposure to lower-income consumers (Jameson, The Glenlivet, Jefferson's) or are attractively priced (Malibu). Moreover, a large portion of Pernod's U.S. growth is coming from specialty brands that still have plenty of white space for growth.”

Despite a “buy” rating on the stock, as you can see on the MarketBeat analyst data page, and some future potential, it’s generally best to avoid a stock that’s currently in the midst of a correction.
Bank Of America Sees Upside In These 2 European Alcohol Stocks

7 Cheap Large-Cap Stocks to Buy Before They Go Back Up

This article presents seven large-cap stocks that are regarded as cheap based on their price-to-earnings ratio. The price-to-earnings ratio tells an investor how much they are paying per share for every dollar of a company's profit.

You can find a stock's P/E ratio by dividing its stock price by its earnings per share. That looks like this:

P/E Ratio = Stock Price/Earnings per share (EPS)

For example, if a company is reporting earnings of $3 per share and their stock is selling for $30 per share, the P/E ratio is 10 ($30 per share/$3 per share). Many investors will look at a benchmark index like the S&P 500 as their guide for defining if a company's P/E ratio makes a stock cheap or expensive. At the time of this writing, the average P/E ratio for stocks in the S&P 500 was   14x to 17x. That is the range we're using for determining if a stock is cheap.

Of course, what is considered a “good" P/E ratio may depend on the market sector. For example, technology stocks tend to have a higher P/E ratio than the S&P average because they are projected to have stronger earnings and stock price growth than the broader market.

View the Stocks Here .

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Diageo (DEO)
2.2967 of 5 stars
$191.39+0.6%2.18%23.37HoldN/A
Pernod Ricard (PDRDY)
0 of 5 stars
$47.12flat0.93%N/AModerate Buy$219.20
Anheuser-Busch InBev SA/NV (BUD)
2.0885 of 5 stars
$60.35+1.0%0.66%23.85Moderate Buy$64.70
Constellation Brands (STZ)
1.9469 of 5 stars
$261.05+0.9%1.23%842.12Moderate Buy$279.79
Brown-Forman (BF.B)
1.5384 of 5 stars
$74.51+0.6%1.10%40.06Hold$73.89
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Kate Stalter

About Kate Stalter

Contributing Author: Retirement, Asset Allocation, and Tax Strategies

Kate Stalter is a Series 65-licensed asset manager, with more than two decades of experience in various areas of financial services. As an investment advisor and financial planner, Kate personally manages client portfolios, with a focus on successful retirement, including asset allocation, income generation and tax strategies. Kate also serves as a capital-markets contributor at Forbes.com, and is an expert columnist for the investment advisory channel at U.S. News & World Report.
Contact Kate Stalter via email at stalterkate@gmail.com.