On Tuesday, Deutsche Bank (ETR:DBKGn) adjusted its outlook on Moncler SpA (BIT:MONC:IM) (OTC: MONRY), reducing the luxury fashion company's price target from €63.00 to €61.00, while continuing to recommend a Hold position on the stock. The revision comes as the analyst anticipates Moncler to reveal its second-quarter results on July 24, with expectations tempered due to a slight underperformance in the broader luxury sector.
Moncler is projected to report a 9% growth in retail sales, supported by approximately 5% from new store openings, which is considered above the low single-digit percentage constant currency (cFX) growth common among its peers. While the brand remains popular, it is not entirely shielded from the fluctuations in consumer spending, especially given the challenging year-over-year comparisons it faces.
The bank's analysis suggests that investor concerns may center around the potential for further negative earnings momentum in the second half of the year, particularly in the fourth quarter. This cautionary stance is due to Moncler's traditionally slower sales growth in the latter half of the year, contrasting with an expected acceleration in the sector. For the full year 2024, the analyst uses a circa 10% constant currency growth as a more fitting benchmark, noting that this figure still surpasses the sector's average.
Moncler's valuation now appears more grounded at 23 times the forecasted 2024 earnings, according to Deutsche Bank's analysis. The revised price target of €61.00 is derived from a discounted cash flow (DCF) model, and the firm's Hold rating is reaffirmed, suggesting a neutral stance on the stock's near-term performance prospects.
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