Kering: Jefferies a buyer once again

(CercleFinance.com) - On Wednesday Jefferies upgraded its rating on Kering's stock from "hold" to "buy", while reducing its target price from 695 euros to 605 euros.


In a report, the US broker supports its upgrade by valuation issues, pointing out that after its return below 500 euros, the stock is trading at the same levels as three years ago while its size and market share have increased in the meantime.

Jefferies - which argues that the stock's YTD underperformance has reduced its market capitalisation by about 27 billion euros - believes that the stock has gone from being a value trap for bargain-hunting investors to a genuine market opportunity.

It is these valuation factors, rather than the group's disappointing investor day, that are behind the upgrade, with Jefferies saying the near-term outlook is mixed.

The broker nevertheless emphasises that the Gucci brand has real "potential" in the medium term, in the same way as Saint Laurent.



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