HSBC announced on Thursday that it had upgraded its recommendation on Pernod Ricard shares to 'hold' from 'lighten', with the target price reduced from €138 to €137.

The broker - which had held a negative opinion on the stock since last December - explains that it expects the French wine and spirits group to continue to face a number of difficulties, but also believes that these 'headwinds' should diminish over time, and therefore favor its growth.

While HSBC does not expect any immediate improvement in the Chinese or American markets, it does anticipate a lesser adverse impact from destocking in the USA, and from the unfavorable base effect following the exit from Russia.

Following the recent downturn in the share price, the broker considers that most of the risks surrounding the case are now well integrated by the market.

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