Is It Too Late To Consider Kering After Its 2025 Share Price Rebound?

• If you are wondering whether Kering is still a bargain after its recent rebound, or if the easy money has already been made, this deep dive is for you.
• The stock is up 25.6% year to date and 25.2% over the last year, even after a softer recent patch with a 7.6% drop over the past month and only a 0.2% gain in the last week, hinting at shifting sentiment and risk perceptions.
• Investors have been reacting to headlines around the luxury sector, including concerns about slowing demand in key markets and Kering’s ongoing brand repositioning efforts at Gucci and other houses. At the same time, strategic moves to refresh creative leadership and strengthen high end positioning have kept long term growth potential in focus.
• On our simple valuation checklist, Kering scores just 1 out of 6. That might sound underwhelming at first. However, the real story only emerges when we compare different valuation approaches and, by the end of this article, explore an even better way to think about what the stock is truly worth.

Kering scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Kering Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth by projecting the cash it can generate in the future and then discounting those amounts back to today, using a required rate of return.

For Kering, the latest twelve month Free Cash Flow is about €1.70 billion. Analysts and internal estimates see this rising steadily, with projections reaching roughly €3.48 billion by 2035 as the company scales its luxury brands and margins. The model used here is a 2 Stage Free Cash Flow to Equity approach, where earlier years rely more on analyst forecasts and later years rely on Simply Wall St extrapolations once explicit estimates run out.

On this basis, the estimated intrinsic value for Kering is €282.76 per share. With the DCF implying the stock is about 4.8% above this fair value estimate, the shares appear slightly overvalued, but not by a margin large enough to be decisive for long term investors.

Result: ABOUT RIGHT

Kering is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Kering.

Approach 2: Kering Price vs Earnings

For a profitable, established business like Kering, the Price to Earnings ratio is a useful shorthand for how much investors are willing to pay for each euro of current profits. In practice, what counts as a normal or fair PE depends on how quickly earnings are expected to grow and how risky those earnings are perceived to be, with faster growth and lower risk justifying higher multiples.

Kering currently trades on about 49.81x earnings, well above the broader Luxury industry average of roughly 17.65x and slightly below its direct peer group at around 53.26x. To move beyond simple comparisons, Simply Wall St uses a proprietary Fair Ratio, which estimates what PE the market should reasonably pay given Kering’s earnings growth outlook, margins, industry, market cap and risk profile.

This Fair Ratio for Kering is 32.91x, meaning the shares trade materially richer than what those fundamentals would typically warrant. Because the current PE of 49.81x sits well above the Fair Ratio, the multiple analysis points to the stock appearing overvalued on this basis.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Kering Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple framework where you describe the story you believe about Kering and then connect that story to concrete assumptions about its future revenue, earnings, margins and, ultimately, fair value.

On Simply Wall St’s Community page, Narratives are easy to create and follow. They let you write out your view of Kering’s brand momentum, store optimization, beauty licensing deals and sector growth, then translate that view into a forecast that produces a fair value you can compare directly with today’s share price to help inform whether you should buy, hold or sell.

Because Narratives are dynamic, they automatically update as new information such as earnings releases, analyst target changes or news about Kering’s potential beauty unit sale to L’Oreal arrives. This helps your fair value estimate stay aligned with the latest data instead of going stale.

For Kering, one investor might build a bullish Narrative around improving margins, digital expansion and sustainability leadership to justify a value closer to €360 per share. Another, more cautious investor might emphasize luxury sector slowdown, execution risk and tourism headwinds to support a much lower view nearer €135. Narratives help you see where your own conviction sits along that spectrum in just a few clicks.

Do you think there's more to the story for Kering? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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