Prada: one of Oddo BHF's sector best picks

(CercleFinance.com) - Oddo BHF confirms its Outperform recommendation on the stock, with an adjusted price target of 65 HKD (vs.
66.40c HKD).

The analyst believes that the group should continue to grow at a pace well above that of the industry over the coming quarters.

We are therefore only marginally adjusting our sales growth forecasts for Q3 and Q4. For Q3, we are expecting +15% y/y cc in retail with Miu Miu at +78% and Prada at +3.4%, for Q4 we are anticipating total retail growth of +10.6% with Miu Miu expected at +48% and Prada at +3%, Oddo BHF says.

Analysts lower their sales and EBIT forecasts by almost -1% for 2024 and 2025. EBIT margin forecasts remain unchanged at 23.1% for 2024, after 22.5% published in 2023 (H2 margin expected at 23.5%, +60bp y/y) and 23.8% for 2025, they add.

The stock is trading at a multiple discount of almost 17% to the LVMH sector benchmark, which we feel is too conservative given the remarkable breakthrough achieved by the Miu Miu brand and the still significant potential for the parent Prada brand, particularly in terms of improving sales performance and profitability. The share remains one of our favorite stocks in the sector, Oddo BHF concludes.


Copyright (c) 2024 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.