Product Launches And EV Expansion Will Revitalize Markets Globally

Key Takeaways

• Expansion in high-growth Asian markets and electric vehicle offerings positions Piaggio for revenue recovery, market share gains, and enhanced brand relevance.
  
• Operational efficiency and premium brand strategy support strong margins, pricing power, and earnings resilience despite competitive pressures.
  
• Ongoing revenue declines, shrinking market share, persistent cost pressures, and weak demand point to significant challenges for growth, competitiveness, and margin sustainability.

Catalysts

Engages in development, manufacture, and distribution of two-wheeler and commercial motor vehicles.

• Renewed product launches in key growth regions like India and Southeast Asia-where rising GDP per capita and younger urban populations are fueling two-wheeler demand-suggest potential for revenue recovery and expansion as markets stabilize and Piaggio's newer scooters gain traction.
  
• Continuing expansion of electric vehicle offerings, including electric scooter and commercial vehicles in Europe, positions Piaggio to capture emerging demand driven by cities' tightening environmental regulations and shifting consumer preference, supporting future top-line growth and improved brand relevance.
  
• Investments in operational efficiency-like cost control, production management, and avoidance of price wars-have resulted in record-high gross margins and stable net financial position, and should drive stronger net margins and earnings resilience as revenue normalizes.
  
• Piaggio's focus on brand equity and premium product positioning enables the maintenance of pricing power amidst aggressive competition from lower-cost Asian manufacturers, supporting stable to higher margins and long-term earnings quality.
  
• Signs of stabilization in key regions (Asia, especially Vietnam and Thailand, and post-destocking in Europe) and organizational improvements (dealer relations, multi-brand retail formats) point to a sequential recovery in volumes and market share, which is likely to positively impact revenues and operating leverage in upcoming periods.

Piaggio & C Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Piaggio & C's revenue will grow by 2.2% annually over the next 3 years.
• Analysts assume that profit margins will increase from 3.5% today to 4.7% in 3 years time.
• Analysts expect earnings to reach €83.3 million (and earnings per share of €0.23) by about July 2028, up from €57.3 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting €108 million in earnings, and the most bearish expecting €56.9 million.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 16.6x on those 2028 earnings, up from 12.1x today. This future PE is lower than the current PE for the GB Auto industry at 30.8x.
• Analysts expect the number of shares outstanding to decline by 0.39% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 17.29%, as per the Simply Wall St company report.

Piaggio & C Future Earnings Per Share Growth

Risks

• Persistent revenue declines across core markets (Europe, U.S., China) were reported, with a roughly 13% drop in the first half of 2025 and no clear signal of quick recovery, indicating ongoing risks to top-line growth and long-term market relevance.
  
• The company is losing market share in key European regions and is facing heightened competitive pressure from Asian (including Chinese and Indian) manufacturers that are increasingly aggressive in pricing and distribution, which poses risks to both revenue and future margins.
  
• Performance in India remains weak, particularly in the commercial vehicle (LCV/3-wheeler) segment, where market share continues to slip and demand is heavily dependent on government EV subsidies-implying structural uncertainty and pressure on margin sustainability.
  
• Management admitted ongoing logistics cost pressures, with no improvement in sight due to geopolitical and shipping disruptions; these sustained high costs could compress net margins and squeeze earnings if not offset elsewhere.
  
• Demand for two-wheelers in Europe is being deferred amidst macroeconomic concerns (such as high interest rates, energy prices, and consumer uncertainty), which, if persistent, could lead to a structural drag on volume growth and impair long-term earnings power.

Valuation

• The analysts have a consensus price target of €2.464 for Piaggio & C based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of €4.1, and the most bearish reporting a price target of just €1.6.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €1.8 billion, earnings will come to €83.3 million, and it would be trading on a PE ratio of 16.6x, assuming you use a discount rate of 17.3%.
  
• Given the current share price of €1.96, the analyst price target of €2.46 is 20.3% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.