A day to forget at Piazza Affari for the fashion stock Salvatore Ferragamo (-10% to 8.21 euros) Thursday 27 June. The stock hits its all-time lows after UBS reduced from 9.5 to 9 euros the target price, confirming the recommendation sell. Analysts cite slowing trends toward the end of Q2 2024, which “put the sequential recovery in the second half at risk.” Despite the stock’s underperformance since the beginning of the year compared to the sector, “we continue to remain cautious on S. Ferragamo, seeing further downside risks to the numbers,” the experts add.
At the beginning of May, Ferragamo released its consolidated revenue figures for the first quarter. The figure is 227 million euros, down 18.3% at current exchange rates and 16.6% at constant exchange rates, with declines in all geographical areas and in all sectors, from leather goods to clothing.
Almost all analysts’ ratings on the stock are negative. Added to the UBS sell is that of Goldman Sachs. Negative opinions (underweight) also from Barclays and Jp Morgan. Equita and Intesa Sanpaolo confirm the hold opinion instead.
Luxury under pressure
The entire luxury sector is suffering a slowdown period. Last June 17, analysts at Stifel they described the sector as “complex, with margins under pressure,” advising caution in investments. Analysts considered «i weak demand trends in all geographical areas except Japan» and the fact that operating expenses are largely fixed for the groups in the sector, with the consequence that «pressure on margins should be a key theme for luxury companies in the first half of 2024 accounts». In a difficult context for the sector, analysts give preference to «stronger businesses» over «restructuring stories with greater execution risks» and reiterate that they favor Hermès/LVMH over Kering, Richemont over Swatch, Moncler/B.Cucinelli (hold rating) over S.Ferragamo and Hugo Boss over Burberry. (reproduction reserved)
Publication time: 27/06/2024 15:55
Last update: 27/06/2024 16:44
