Economic Information Daily, 6th exclusive report: Prada (01913) is currently down 1.7%, trading at HK$36.26, with approximately 730,000 shares traded, involving HK$268.6 million.
UBS has lowered its target price for Prada from HK$39.5 to HK$36.3, maintaining a "Neutral" rating.
In a research report, the bank stated that Prada is currently effectively managing the normalization of Miu Miu's growth, and the resilience of the Prada brand supports market expectations for a soft landing. However, ongoing Middle East conflicts, coupled with weak consumer demand in both China and the U.S., may pressure the overall luxury sector in the third quarter.
Meanwhile, slowing Google search trends for the group's brands make it harder for investors to determine whether the slowdown reflects cyclical weakness in the sector or intensified competition in the luxury market, thus raising doubts about growth prospects for the fourth quarter and beyond. Additionally, suppressed consumer sentiment may exacerbate the execution risks of Versace's transformation and restructuring. Although the bank continues to view Prada as a potential long-term consolidator among Italian luxury brands, it prefers to remain on the sidelines during the transitional year of 2026.
For the third quarter, the bank expects group revenue to reach €1.488 billion, reflecting a 1% year-on-year increase in organic sales. By brand, Prada's retail organic sales are expected to grow 1% year-on-year, Miu Miu is expected to remain flat, and Versace's retail sales are forecast at €92 million. The bank anticipates group organic sales to grow 3% year-on-year in 2027, with Prada brand organic sales growing 2% and Miu Miu rising 3%; EBIT for the period is expected to be €1.242 billion, with a corresponding margin of 18.8%. (am)
UBS has lowered its target price for Prada from HK$39.5 to HK$36.3, maintaining a "Neutral" rating.
In a research report, the bank stated that Prada is currently effectively managing the normalization of Miu Miu's growth, and the resilience of the Prada brand supports market expectations for a soft landing. However, ongoing Middle East conflicts, coupled with weak consumer demand in both China and the U.S., may pressure the overall luxury sector in the third quarter.
Meanwhile, slowing Google search trends for the group's brands make it harder for investors to determine whether the slowdown reflects cyclical weakness in the sector or intensified competition in the luxury market, thus raising doubts about growth prospects for the fourth quarter and beyond. Additionally, suppressed consumer sentiment may exacerbate the execution risks of Versace's transformation and restructuring. Although the bank continues to view Prada as a potential long-term consolidator among Italian luxury brands, it prefers to remain on the sidelines during the transitional year of 2026.
For the third quarter, the bank expects group revenue to reach €1.488 billion, reflecting a 1% year-on-year increase in organic sales. By brand, Prada's retail organic sales are expected to grow 1% year-on-year, Miu Miu is expected to remain flat, and Versace's retail sales are forecast at €92 million. The bank anticipates group organic sales to grow 3% year-on-year in 2027, with Prada brand organic sales growing 2% and Miu Miu rising 3%; EBIT for the period is expected to be €1.242 billion, with a corresponding margin of 18.8%. (am)
