European Capital Partners - SHow me the way to the next whiskey bar Discover this fund | European Capital Partners
Asset management and fund structuring boutique

SHow me the way to the next whiskey bar

Jun 05, 2024

European beverage stocks faced significant challenges in the stock market over the past year, experiencing declines of 20% to 40%. Several fundamental factors contributed to this downturn, such as the potential imposition of Chinese tariffs on brandy and declining spirit volumes in the US. Additionally, companies like Diageo faced internal issues. As a result, spirits companies have seen a substantial reduction in their high valuation premiums, leading to more reasonable multiples. For instance, Diageo is now trading at 17.7 times forward earnings, which the Financial Times reports is a 33% premium to the MSCI Europe, down from 100% in 2022. For contrarian investors like us at ECP, this shift has piqued our interest, prompting us to revisit the sector.

Image preview

Return to overview