MS says 'creative supply shock' favours Kering, LVMH; downgrades Prada, Hermes

Prada SpA

07/10/2025 08:44

** Morgan Stanley adjusts its luxury view to account for a "creative supply shock" it sees in the sector, upgrading Kering PRTP.PA and LVMH LVMH.PA to "overweight" and downgrading Prada 1913.HK and Hermes HRMS.PA to "equal-weight"

** MS says the new burst of creativity, along with a fashion pendulum swing towards maximalism, can create a situation where "supply could create its own demand"

** Kering is the broker's new top pick; it says "the story is changing" under new CEO Luca de Meo and praises promising creative debuts at the Gucci and Bottega Veneta brands

** For LVMH, it points to positive developments from new creative direction at Dior — where it says sentiment seems to have shifted "overnight" — as well as Celine and Fendi

** In contrast, it notes growth at Hermes is normalising from a low double-digit to a high single-digit percentage, while Prada's star brand Miu Miu faces risks from rising competition

** Shares of Kering and LVMH rise close to 2% in early trading in Paris

RATING AND PRICE TARGET CHANGES:

COMPANY
RATING
OLD RATING
PT
OLD PT
LVMH
overweight
equal-weight
EUR 635
EUR 515
Kering
overweight
equal-weight
EUR 370
EUR 250
Hermes
equal-weight
overweight
EUR 2,420
EUR 2,550
Prada
equal-weight
overweight
HK$ 53
HK$ 60

(Reporting by Mateusz Rabiega)

((Mateusz.rabiega@thomsonreuters.com))