Downgrade to Neutral following outperformance
We downgrade Remy Cointreau to Neutral from Buy following the stock’s outperformance post its FY3Q17 sales results. Remy reported a strong sales beat, driven by better organic performance from the cognac division, notably in China. The shares reacted positively to the results, closing up 6% on the day. We have increased our FY organic sales growth estimate to 5% (from 4%), and our FY organic EBIT growth increases to 10% (from 9%). Since being added to the Buy List on March 10, 2015, Remy’s shares are up 32% vs. the FTSE World Europe’s -7% and are up 14% vs. our European Staples coverage over the last three months.