Analyst Oliver Chen from TD Cowen maintained a Hold rating on Kering SA (0IIH – Research Report) and decreased the price target to €175.00 from €260.00.
Oliver Chen has given his Hold rating due to a combination of factors impacting Kering SA’s performance. The company’s flagship brand, Gucci, has experienced a more significant decline in sales than anticipated, particularly in the Asia-Pacific region, which is a crucial market for the company. This decline is compounded by challenging traffic trends and a lack of clear strategies to improve performance in this region.
Moreover, while there is potential for revitalization with Demna’s upcoming creative direction at Gucci, the tangible benefits of this shift are not expected until later in the year. Additionally, Kering faces challenges with pricing strategies due to tariffs and weakening consumer sentiment, which may hinder their ability to leverage price increases as effectively as competitors like LVMH. These factors, combined with adjustments in sales and earnings estimates, have led to a cautious outlook, resulting in the Hold rating.
In another report released yesterday, RBC Capital also maintained a Hold rating on the stock with a €240.00 price target.