Kering: what catalysts?

(Boursier.com) — Up 0.6% to 401 euros, Kering slightly outperformed the market this Wednesday morning. Among the latest broker opinions, Bernstein remains at ‘market performance’ on the luxury group, but reduces its target from 492 to 436 euros. Stifel had already downgraded the group to ‘hold’ with a target cut from 530 to 430 euros, while ‘weakening demand in the sector since September should make it more difficult for Gucci to simultaneously achieve a recovery and a rapid rise in her brand…
The brand elevation strategy for YSL, BV and Balenciaga will ultimately improve brand value across Kering’s portfolio, but will continue to put pressure on volumes at a time when the potential for significant gains in terms of price mix seems limited. The stock seems to have become “cheap”, but lacks catalysts for a revaluation, which will require more patience from investors if the current situation in terms of demand for luxury products persists in 2024, underlined Stifel which remains of the opinion that the market underestimates what Kering’s portfolio is capable of producing in the next 5 years, but that it probably overestimates what it can produce in the next 5 months, “given the unfavorable external environment which makes the stories of recovery/elevation of brands more exposed to further degradation by consensus.”