Ferragamo: UBS downgrades to sell

(CercleFinance.com) - UBS has downgraded its rating on the Italian luxury group Ferragamo from "neutral" to "sell".


The recovery is not for now, experts say, who have also lowered their 12-month target price from 22 euros to 19 euros (-13.6%).

On the strength of their internal department, the UBS Evidence Lab, analysts fear that Salvatore Ferragamo's organic growth will be disappointing this year, expecting it to reach just 2%, against 4% previously, well below the 7% expected by the market.

Admittedly, in the medium term, the group expects to grow twice as fast as its market and therefore grow at a rate of 6% to 8% p.a. - the consensus expects this growth from 2018. However UBS does not think the same, with the broker recalling that organic growth was negative in H2 2017, in particular due to the sell-off of inventories at lower prices, a trend that should persist in early 2018, UBS predicts.

In this context, the launch of new products should not result in a marked recovery in organic growth this year, experts predict.


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