The analyst fair value estimate for Kering has increased from €225.74 to €252.91. This change is driven by analysts noting modest improvements in revenue growth and profit margin expectations, despite ongoing uncertainty in the luxury sector.
Analyst Commentary
Recent analyst activity around Kering reflects a divided outlook on the luxury group’s future performance. Some remain cautious about the sector’s growth prospects, while others have highlighted potential catalysts that could drive the company’s valuation higher in the medium term.
Bullish Takeaways
- Bullish analysts have recently raised price targets, citing improved creative leadership across Kering’s primary luxury brands. This could support a rebound in brand momentum and revenue growth.
- The company has been recognized as a top pick within the luxury segment. There are expectations that current strategic changes and brand innovations may set Kering apart from its peers over the next cycle.
- Upgrades to positive ratings suggest that expectations are stabilizing. Forecasts for profit margins and growth are beginning to improve following a period of sector underperformance.
- Valuation upside is viewed as there could be more room for multiple expansion if Kering successfully navigates brand repositioning and new strategic leadership transitions.
Bearish Takeaways
- Bearish analysts warn that the luxury sector’s long-term growth rates have moderated significantly. Anticipated annual demand expansion is just 2% to 3%, which is well below historical averages.
- There are concerns that Kering’s recovery could be slow. This is driven by a wider “hangover” in the luxury industry after years of outsized growth, which could limit near-term earnings momentum.
- Despite some target price increases, a number of analysts maintain negative or neutral stances on the stock. These analysts highlight persistent uncertainty and execution risk related to brand repositioning efforts.
- Ongoing market volatility and slower than expected demand in key geographies continue to weigh on sentiment and valuation assumptions among the more cautious voices.
What's in the News
- Kering SA is in advanced talks with Qatar’s royal family to sell a majority stake in a Milan luxury property it acquired in 2024 for €1.3 billion. The company is also exploring sales of properties in New York, Milan, and Paris after a 15% sales decline in the second quarter. (Il Corriere della Sera)
- A special shareholders meeting is scheduled for September 9, 2025, in Paris. The agenda includes remuneration policies for senior leaders and the appointment of Luca de Meo as Director for a term outside the normal four-year period. (Company Statement)
Valuation Changes
- Fair Value Estimate has risen from €225.74 to €252.91, indicating increased analyst confidence in the company’s future outlook.
- Discount Rate has fallen slightly from 9.53% to 9.38%, reflecting a marginal decrease in perceived risk or cost of capital.
- Revenue Growth expectations have increased modestly from 2.98% to 3.04%.
- Net Profit Margin projections have edged up from 8.03% to 8.03%, signaling stability in profitability expectations.
- Future P/E Ratio has climbed from 26.2x to 29.2x, suggesting that analysts are applying a higher valuation multiple.
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