Kering: RBC reduces target price

(CercleFinance.com) - Royal Bank of Canada on Wednesday cut its price target for Kering from E430 to E400, while renewing its 'outperform' rating on the stock.


In a study devoted to the luxury goods sector, the broker said it did not anticipate much improvement in the performance of Gucci, the French luxury group's flagship brand, forecasting a 17% organic decline in activity for the second quarter.

On the margin front, Kering had already warned that it expected a "significant" decline in its EBIT margin for the quarter, with the y-o-y drop expected between 40% and 45%, RBC says, which attributes this decline to the investments made within the brand to ensure its turnaround.

Regarding YSL, the professional forecasts Q2 sales of E725m, down 5% on an organic basis, while Bottega Veneta should fare better, with organic growth of 1%.

Kering is set publish its Q2 results on 24 July.


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