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Kering SA (FR:KER)
:KER

Kering SA (KER) AI Stock Analysis

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Kering SA

(LSE:KER)

Rating:62Neutral
Price Target:
Kering SA's overall stock score reflects a challenging environment with significant pressure on financial performance due to declining revenues and profitability. The stock is in a bearish technical position, with indicators pointing to a downward trend. However, the company's valuation is supported by a reasonable P/E ratio and a high dividend yield, which may attract income-focused investors. The ability to maintain cash flow and a stable balance sheet are positive factors, but improvements in revenue growth and operational efficiency are critical for future performance.
Positive Factors
Investment in Brands
Kering is focused on investing in its luxury fashion brands to enhance their desirability, exclusivity, and sustainability while delivering high-quality experiences for customers.
Leadership and Creativity
There is a constructive view on Demna's ability to drive relevance and excitement for Gucci, although his creative launch isn't slated until 4Q.
Product Launches
Handbag changes could help drive traffic and sales densities of stores, with key product launches planned.
Negative Factors
Earnings Pressure
There is a risk for continued declines at Gucci and YSL, which could drive further earnings pressure combined with lack of clear path to improvement in APAC.
External Market Challenges
The company faces external headwinds such as weakening US demand and continued weakness in Chinese mall traffic.
Sales Decline
Kering had a weak start to 2025, with group comparable sales down 14% and its flagship Gucci brand continues to underperform with a 25% decline.

Kering SA (KER) vs. iShares MSCI France ETF (EWQ)

Kering SA Business Overview & Revenue Model

Company DescriptionKering SA develops, designs, manufactures, markets, and sells apparel and accessories. The company offers shoes; leather goods, including handbags and wallets, purses, and other leather products; eyewear, textile accessories, etc.; and jewelry and watches, as well as ready-to-wear products for men and women. It also provides perfumes and cosmetics. The company provides Gucci, Saint Laurent, Bottega Veneta, Alexander McQueen, Balenciaga, Brioni, Boucheron, Pomellato, DoDo, Qeelin, Girard-Perregaux, Ulysse Nardin, and Kering Eyewear branded products. It sells its products through stores and e-commerce sites. As of December 31, 2021, it operated 1,565 stores. Kering SA sells its products in the Asia-Pacific, Western Europe, North America, Japan, and internationally. The company was formerly known as PPR SA and changed its name to Kering SA in June 2013. Kering SA was founded in 1963 and is based in Paris, France.
How the Company Makes MoneyKering SA generates revenue primarily through the sale of luxury goods across its portfolio of brands. The company's key revenue streams include direct retail, wholesale distribution, and online sales. Direct retail, through company-operated stores, accounts for a significant portion of Kering's income, as it allows for higher margins and direct consumer engagement. Wholesale distribution involves selling products to third-party retailers, which helps expand brand reach and accessibility. The company has also embraced digital channels, enhancing its e-commerce platforms to cater to the growing demand for online luxury shopping. Kering benefits from strategic brand positioning and marketing, leveraging the unique identity and heritage of its brands to appeal to affluent consumers globally. Additionally, the company may engage in selective licensing agreements and partnerships to broaden its market presence and product offerings.

Kering SA Financial Statement Overview

Summary
Kering SA's financials present a mixed picture. The income statement reflects declining revenues and pressure on profitability margins, although the gross profit margin remains strong. The balance sheet is stable with balanced leverage, but profitability on shareholder investments has decreased. Cash flow analysis shows robust cash generation despite a decline in free cash flow. Overall, maintaining positive cash flows and a stable financial foundation are positives, but there's a need for improvement in revenue growth and operational efficiency.
Income Statement
65
Positive
Kering SA's income statement shows a decline in total revenue from 2023 to 2024, with revenue dropping from €19.566 billion to €17.194 billion. The gross profit margin remains strong at approximately 73.8% in 2024, and the net profit margin is about 6.6%. However, the decline in EBIT and EBITDA margins from 24.3% to 13.4% and 32.9% to 27.1%, respectively, suggests pressure on operational efficiency and profitability.
Balance Sheet
70
Positive
The balance sheet reflects a moderate financial structure with a debt-to-equity ratio of 1.35, indicating a relatively balanced use of debt and equity. The return on equity (ROE) stands at 7.6%, showing profitability on shareholder investments, albeit lower compared to previous years. The equity ratio is 34.4%, highlighting a stable capital structure but with room for improvement in terms of leveraging equity more effectively.
Cash Flow
72
Positive
Kering SA's cash flow analysis reveals a decrease in free cash flow from €1.848 billion in 2023 to €1.4 billion in 2024. The operating cash flow to net income ratio is strong at 4.15, indicating robust cash generation relative to net earnings. Despite a decline in free cash flow, the company's ability to maintain positive cash flow from operations is a positive indicator.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
17.19B19.57B20.35B17.65B13.10B
Gross Profit
12.68B14.93B15.20B13.07B9.51B
EBIT
2.31B4.75B5.59B4.80B3.30B
EBITDA
4.67B6.43B7.00B6.15B4.58B
Net Income Common Stockholders
1.13B2.98B3.61B3.18B2.15B
Balance SheetCash, Cash Equivalents and Short-Term Investments
3.56B3.92B4.34B5.25B3.44B
Total Assets
43.35B41.37B33.94B31.07B28.01B
Total Debt
20.14B17.82B11.19B9.59B9.26B
Net Debt
16.62B13.90B6.86B4.34B5.82B
Total Liabilities
27.62B25.36B19.16B17.33B15.97B
Stockholders Equity
14.90B15.21B14.00B13.35B11.82B
Cash FlowFree Cash Flow
1.40B1.85B3.21B3.94B2.10B
Operating Cash Flow
4.71B4.46B4.28B4.88B2.89B
Investing Cash Flow
-3.19B-7.30B-2.77B-451.50M-196.50M
Financing Cash Flow
-1.90B2.38B-2.14B-2.93B-1.62B

Kering SA Technical Analysis

Technical Analysis Sentiment
Negative
Last Price175.24
Price Trends
50DMA
175.28
Negative
100DMA
210.11
Negative
200DMA
218.65
Negative
Market Momentum
MACD
-1.72
Negative
RSI
48.16
Neutral
STOCH
55.88
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:KER, the sentiment is Negative. The current price of 175.24 is below the 20-day moving average (MA) of 177.28, below the 50-day MA of 175.28, and below the 200-day MA of 218.65, indicating a bearish trend. The MACD of -1.72 indicates Negative momentum. The RSI at 48.16 is Neutral, neither overbought nor oversold. The STOCH value of 55.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FR:KER.

Kering SA Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
62
Neutral
$6.94B11.292.95%3.87%2.70%-24.49%
FRKER
62
Neutral
€21.58B18.977.52%3.41%-12.12%-62.09%
$285.21B56.4228.67%1.03%
€80.14B15.2122.73%2.93%
€111.66B47.096.00%1.61%
€238.11B18.7719.53%2.73%
DE7EK
€96.26M-7.61%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FR:KER
Kering SA
175.24
-142.93
-44.92%
HESAF
Hermes International
2,680.78
348.29
14.93%
GB:0NPL
Christian Dior
439.00
-262.32
-37.40%
GB:0OMK
EssilorLuxottica SA
245.50
39.95
19.44%
GB:0HAU
LVMH Moet Hennessy Louis Vuitton
471.67
-270.25
-36.43%
DE:7EK
ST Dupont SA
0.09
0.04
80.00%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.