Berenberg concerned over recent Kering rally as it sees economic headwinds to persist

Salvatore Ferragamo

04/08/2025 06:53

** Following recent share price rally, Berenberg cuts its PT on Kering PRTP.PA by 3% to 160 euros as it further reduces 2026 estimates, citing persisting economic headwinds

** Kering is one of three luxury names, along with Swatch  and Burberry , whose shares gained value in July while the rest of the sector lost 9% on average, the broker adds

** "This rotation from low to high sector beta is dangerous, in our view, given the deteriorating macro outlook ... and high operating leverage in the luxury business model," the broker says

** Kering's share price, still down 9.3% YTD and having lost about 40% in value in 2024, rose about 17% over July  - boosted by hopes about Gucci turnaround and the group's new CEO

** Berenberg says the risk to estimates remains firmly to the downside, as Kering and Swatch remain among its least preferred names in the sector

** It cuts its 2026 revenue estimate by 7% and EBIT by 19%, on top of earlier reductions of 11% and 23% respectively

** The broker says it now focuses on EV/sales ratio, adding that Kering's is near 12-year lows but still at a substantial premium to Ferragamo SFER.MI and Swatch

(Reporting by Piotr Lipinski)

((piotr.lipinski@tr.com))