LIVE MARKETS-Cheers! Pernod Ricard is Europe's most shorted stock - S3 Partners

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CHEERS! PERNOD RICARD IS EUROPE'S MOST SHORTED STOCK - S3 PARTNERS

French spirits maker Pernod Ricard is the most shorted stock on the European stock index, according to data analytics firm S3 Partners, as investors increasingly bet against the firm following its dismal share performance in 2024.

The French firm PERP.PA holds the highest short position in the Euro STOXX index .STOXXE in terms of percent of float shorted, standing at 5.23% now, versus less than 1% at the beginning of 2024, according to S3 Partners.

Shares of brandy makers in Europe were hammered in 2024 after China opened an anti-dumping investigation on brandy imported from the EU. In December, China's commerce ministry said it would extend its investigation by three months.

Pernod dropped nearly 32% last year, while rival Remy Cointreau RCOP.PA shed more than 49%, compared with the STOXX index of food and drink makers .SX3P, which fell 12.3% in 2024.

Last week, spirits makers in the U.S. and Europe sold off after U.S. Surgeon General Vivek Murthy stated alcoholic drinks should carry a warning about cancer risks on their label.

"Rising short interest among beverage manufacturers points to market scepticism about their ability to recover amid ongoing sell-offs," noted the S3 Research Team.

"The divergence between short positions and stock performance signals a shift in investor sentiment, warranting close monitoring."

Other beverage companies such as Anheuser-Busch ABI.BR, Diageo DGE.L and Heineken HEIN.AS, which were also enveloped in the selloff, have relatively smaller short positions, less than 1.5% each.

U.S. alcoholic drink makers like Constellation Brands STZ.N and Brown-Forman BFb.N have also seen declines lately, with the short interest on Brown-Forman now standing at 7.8%.

Pernod shares were down 0.2% on the day, trading near their lowest since 2017.

Back in October, Pernod Ricard said it still expected to return to sales growth in the 2024/25 fiscal year, despite reporting a bigger-than-expected fall in first quarter sales, caused partly by weakness in China.

(Shashwat Chauhan)

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