If you think about what investors prize these days in the alcoholic beverage space – leverage to growing emerging markets, leverage to premium (especially super-premium brands), leverage to off-premise consumption – then Davide Campari-Milano (OTCPK:DVDCY) (“Campari”) has... very little of that. What it does have, though, is strong organic growth, and I believe that is largely responsible for the robust valuation of this company.
I certainly see organic growth potential, and I think Campari has done a laudable job of shifting its marketing message during COVID-19 to drive increased at-home consumption. Still, for a company with what I see as less prospective revenue growth and margin leverage than more reasonably-priced players like Pernod Ricard (OTCPK:PDRDY), I don’t quite understand the valuation here.
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