Three Top Alcohol Stocks To Watch Now As High Inflation Continues By Invezz

Three Top Alcohol Stocks To Watch Now As High Inflation Continues By Invezz
Three Top Alcohol Stocks To Watch Now As High Inflation Continues By Invezz

It’s earnings season right now, and companies across the board are posting results muted by the fact that inflation is still higher in the United States, with the prospect of interest rate cuts receding. again with monthly data.

Alcohol brands are known to be resilient and “defensive” stocks, even in challenging environments characterized by high inflation and lower economic growth. This is certainly one of the reasons – along with the penchant for regular and generous dividends – which pushes investors to choose them.

But many alcohol stocks have also been under pressure. The share price of the leading spirits producer and maker of Guinness, Diageo (LON:), for example, has fallen almost 25% over the past year. So it makes sense to be sober when choosing which alcohol stock to support.

Here are our top three picks for alcohol stocks you might want to keep a close eye on for summer 2024:

  • Heineken
  • Constellations Brands
  • LVMH (EPA:)

1. Heineken

Founded in the 1800s in the Netherlands by Gerhard Heineken, this world-famous beer maker’s iconic green bottles are a mainstay around the world.

Heineken’s share price has so far held up better than many alcohol brands in 2024, up 3.81% this month and down just 0.7% this year through here.

And the situation could soon improve for Heineken. Summer is arriving in most of the world’s major economies in less than a month, and traditionally, beers are known to perform better in these warmer months of more outdoor socializing than spirits, which generally trade better during the holiday season and its colder climate.

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Separately, as part of its Star Pubs business, the company recently announced plans to reopen and refurbish more than 600 of its pubs across the UK as part of a £39 million investment plan .

2. Constellation Brands

Constellation Brands is the maker of Corona and Modelo beers, among many other beers, wines and spirits.

On April 11, Constellation announced in its fourth quarter 2023 results that the company exceeded EPS guidance for fiscal 2024 as its beer business outperformed growth expectations. These included an 11% increase in operating profit and a 5% increase in net sales for the year, as well as a fiscal 2025 earnings per share outlook of $13.40 to $13.70 $ per share.

And that’s not all. Constellation shares have performed well lately compared to most of the alcohol industry. Its stock price is up more than 5% this year to date. In fact, over the last 12 months, Constellation’s stock price is up 12%.

3. LVMH

You might not realize at first that LVMH – the luxury supergroup perhaps best known for fashion brands like Louis Vuitton and Dior – is an alcohol stock. But it also owns some of the world’s most exclusive champagne and brandy names, including Hennesy, Moët and Veuve Clicquot.

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The brand is sure to be at the forefront of this year’s Paris Summer Olympics, with LVMH announcing last year that the company would sponsor the event and provide Chaumet medals and Moët Hennessy wine to the winners.

It also helps that the LVMH stock price has seen a decent run recently. LVMH is up 8.05% this year so far.

That said, LVMH’s alcohol business, for all its prestige, has been going through a more difficult time of late. While LVMH recorded a total organic growth of 3% in its turnover, its wines and spirits branch recorded a drop of 12% in its turnover in its latest financial results.

This article appeared first on Invezz.com France

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