From Morningstar: 2025-06-05 07:06:00

The alcoholic beverage industry has been underperforming since 2023, leading to undervalued European-listed drinks stocks, partly due to negative quarterly results and uncertainty over US trade policy. Factors like health trends favoring sobriety and teetotalism also play a role.

US and Chinese markets are crucial for the industry, with a downward trend in alcohol consumption impacting sales. Cultural shifts towards health and fitness, along with regulatory proposals for alcohol labels, are influencing consumer behavior. Premium brands are gaining popularity, especially in emerging markets.

Morningstar analysts believe the industry’s weakness factors will diminish over time, but US tariffs create short-term uncertainty. Leading companies with diversified portfolios should weather the current pressures. Among the undervalued stocks are Davide Campari-Milano, Rémy Cointreau, Pernod Ricard, Diageo, and Heineken, each facing unique challenges and opportunities.



Read more at Morningstar: Is it Time to Invest in Alcohol Stocks?