Analyst Mavis Hui of DBS maintained a Hold rating on Kering SA (0IIH – Research Report), with a price target of €249.00.
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Mavis Hui has given his Hold rating due to a combination of factors impacting Kering SA’s financial performance. The company’s revenue has experienced a significant decline, with a 12% year-over-year drop in 2024, influenced by reduced store traffic and strategic decisions to enhance exclusivity in wholesale distribution. Additionally, recurring operating income has fallen sharply by 46%, resulting in a decreased operating margin.
Despite these challenges, Kering SA is committed to long-term growth through investments in its luxury brands, focusing on sustainability and customer-centric strategies. The company is navigating a tough market environment, particularly in China, and is undergoing strategic repositioning, especially with its Gucci brand. While short-term performance is under pressure, the company aims to optimize its cost structure and maintain its long-term strategic goals. The Hold rating reflects the belief that current weaknesses are temporary setbacks on the path to rebuilding a stronger foundation.
In another report released on May 1, RBC Capital also maintained a Hold rating on the stock with a €180.00 price target.