Kering: UBS remains a buyer; raises target price

(CercleFinance.com) - In turn UBS welcomes the very upbeat sales published by luxury group Kering this morning.


Maintaining their buy rating on the share, analysts have raised their 12-month target price from 475 euros to 510 euros (+7.3%).

Analysts point out that the group's sharp 36.5% organic growth exceeds their own forecast of 29%, thanks to the "stellar" performance of the Gucci brand (+49%).

UBS points out that its buy rating on the share is based on the Gucci brand's ever more positive results and free cash flow, which benefits from the Chinese and American consumers' appetite, millenials' spending, and a double-digit growth/price mix, the broker says in a research note.

Despite its rise, the Kering share is trading at 19.3x its 2019e earnings, which represents a discount of about 11% relative to the sector, UBS calculates.


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