Kering SA (0IIH – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst yesterday. Analyst Rogerio Fujimori from Stifel Nicolaus maintained a Hold rating on the stock and has a €215.00 price target.
Rogerio Fujimori has given his Hold rating due to a combination of factors affecting Kering SA. The company is facing significant challenges, including a decline in sales forecasts for key brands such as Gucci, YSL, and Balenciaga. These brands are undergoing creative transitions, which are expected to impact their performance negatively in the short term. Additionally, external factors such as weakening demand in the US and persistent issues with mall traffic in China are contributing to a less favorable market environment for luxury goods.
Despite these challenges, the valuation of Kering SA appears supportive, particularly when considering the EV/sales ratio. However, the stock is unlikely to outperform until there is a positive shift in Gucci’s sales revisions. The focus for the near term should be on cash flow generation to manage the company’s debt levels, especially with the potential acquisition of Valentino in the future. Overall, these elements contribute to the Hold rating, suggesting a cautious approach until the company’s strategic and market conditions improve.
Fujimori covers the Consumer Cyclical sector, focusing on stocks such as Hermes International, Prada SpA, and The Swatch Group. According to TipRanks, Fujimori has an average return of 2.1% and a 49.31% success rate on recommended stocks.
In another report released today, Deutsche Bank also downgraded the stock to a Hold with a €205.00 price target.