AnalystConsensusTarget updated the narrative for KER

Kering's analyst price target has increased from approximately €253 to €284, reflecting improved expectations for revenue growth and profitability. However, analysts continue to cite ongoing sector headwinds and valuation concerns.

Analyst Commentary

Recent analyst notes on Kering reflect a divided sentiment, with both optimism and caution shaping near- and medium-term expectations. Below, key bullish and bearish takeaways are summarized based on the latest street research.

• Bullish analysts have raised price targets for Kering, citing improved top-line growth prospects and progress on profitability initiatives.
• Kering remains a favored pick in the luxury goods sector. There is optimism around recent creative leadership changes and potential for renewed brand momentum.
• Upgrades to positive ratings are tied to the belief that the valuation now offers a more attractive entry point following previous underperformance.
• The luxury market, while normalizing, is still seen as supportive for selective premium brands positioned for long-term gains.

• Bearish analysts have issued downgrades, primarily due to concerns that Kering's shares have doubled in value recently. This development is seen as limiting further near-term upside.
• Sector headwinds are expected to weigh on demand. Forecasts for luxury market growth have moderated to just 2% to 3% annually, compared to historical averages.
• Some see valuation as stretched relative to execution risks, particularly as the sector emerges from a multi-year period of accelerated growth.
• There are concerns regarding reliance on specific licenses and the need for continued product and brand innovation to defend market position in a more competitive landscape.

What's in the News

• Kering is in discussions to sell its beauty business to L'Oreal in a deal valued at about $4 billion, with an announcement possible as soon as next week (The Wall Street Journal).
• Kering and L'Oreal announced a binding long-term partnership in luxury beauty and wellness, which includes the sale of the House of Creed to L'Oreal, along with exclusive 50-year licenses for Kering's iconic brands such as Gucci, Bottega Veneta, and Balenciaga in fragrance and beauty products.
• The partnership values the agreement at EUR4 billion, payable in cash at closing. Closing is expected in the first half of 2026. The agreement also includes provisions for future royalties and a planned 50/50 joint venture to pursue wellness and longevity ventures.
• Kering is also in advanced talks with Qatar’s royal family to sell a Milan luxury property. Further divestment of properties in New York, Milan, and Paris is under consideration (Il Corriere della Sera).

Valuation Changes

• Fair Value has risen from €252.91 to €283.73. This reflects upgraded assessments of Kering's business prospects.
• Discount Rate has fallen slightly from 9.38% to 9.32%. This signals a marginal decrease in perceived risk or cost of capital for the company.
• Revenue Growth expectations have increased marginally from 3.04% to 3.20% annually. This highlights a more optimistic sales outlook.
• Net Profit Margin has improved from 8.03% to 8.58%. This suggests greater profitability anticipated in future reporting periods.
• Future P/E ratio has increased from 29.15x to 30.41x. This indicates a higher multiple being assigned to projected earnings.