Kering: Société Générale raises target price to 545 euros
(CercleFinance.com) - Maintaining its buy rating on the share of French luxury goods group Kering, Société Générale (SG) has raised its 12-month target price from 510 euros to 545 euros.
This means upside potential of around 15%.
Indeed, Kering's big brands - starting with Gucci - announced very strong growth last year. However, SG does not think that this trend is over: while the luxury sector is expected to grow by 7% in 2019, with management believing the consensus "reasonable," which expects organic growth of 10% to 12% this year, SG expects 13%, with Gucci reporting between 14% and 14.5%. In addition, Kering's operating margin is expected to reach 30%, while that of the rest of the sector is around 20%.
"The market continues to underestimate the scope and scale of the Gucci upcycle and overstate risks," SG says in its research report.
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
This means upside potential of around 15%.
Indeed, Kering's big brands - starting with Gucci - announced very strong growth last year. However, SG does not think that this trend is over: while the luxury sector is expected to grow by 7% in 2019, with management believing the consensus "reasonable," which expects organic growth of 10% to 12% this year, SG expects 13%, with Gucci reporting between 14% and 14.5%. In addition, Kering's operating margin is expected to reach 30%, while that of the rest of the sector is around 20%.
"The market continues to underestimate the scope and scale of the Gucci upcycle and overstate risks," SG says in its research report.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.