Prada: Oddo begins to monitor as a buyer

(CercleFinance.com) - After a long period of stagnating sales and eroding profitability, Prada has regained visible commercial momentum in recent half-years and its recent financial performance now puts it in a good position in the sector, Oddo says.


As such, analysts have an Outperform rating on the stock, with a target price of 48.5 HKD (current price about 41 HKD, +2.9%), which represents 12m upside potential of 20%, the analyst adds, also saying that the company can maintain above-industry average earnings growth over time and achieve mega-brand status in soft luxury.

Sales growth should remain in line with, or slightly above, the industry average (the broker expects +10% y/y at CER in H2, +7% y/y at CER for 2023, +9% at CER for 2024): a 10-year average rate of +8% p.a. is credible. The group can target an EBIT margin of 24%/25% over the medium term, which means above-average earnings growth, Oddo adds.


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