Kering: Credit Suisse downgrades buy rating
(CercleFinance.com) - In a report on the luxury goods sector, Credit Suisse has downgraded its buy rating on the French group Kering, now "neutral" towards it.
Alongside this downgrade the broker has reduced its target price from 540 euros to 510 euros.
Analysts' main argument is that, "the growth of Chinese demand has probably reached its peak. Following two years of double-digit growth, some China leading indicators, including consumer confidence, stock markets, house price inflation and the performance of Macau gaming stocks suggest that Chinese demand is likely to slow from 2H18," according to the report.
Maintaining buy ratings with the purchase on LVMH, Swatch and Diageo, Credit Suisse has downgraded Kering to neutral, believing that "the Gucci relaunch story has now largely played out, the Bottega Veneta turnaround is still too far away and earnings upgrades are becoming more uncertain".
Finally, analysts believe that Kering could make acquisitions in 2019, while valuations in the sector are still "very demanding".
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
Alongside this downgrade the broker has reduced its target price from 540 euros to 510 euros.
Analysts' main argument is that, "the growth of Chinese demand has probably reached its peak. Following two years of double-digit growth, some China leading indicators, including consumer confidence, stock markets, house price inflation and the performance of Macau gaming stocks suggest that Chinese demand is likely to slow from 2H18," according to the report.
Maintaining buy ratings with the purchase on LVMH, Swatch and Diageo, Credit Suisse has downgraded Kering to neutral, believing that "the Gucci relaunch story has now largely played out, the Bottega Veneta turnaround is still too far away and earnings upgrades are becoming more uncertain".
Finally, analysts believe that Kering could make acquisitions in 2019, while valuations in the sector are still "very demanding".
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.