We are maintaining our fair value estimate of EUR 510 per share for narrow-moat Kering, even as we expect to reduce our estimates for profitability in 2024, in line with management’s guidance. Our current EBIT estimates were already below FactSet consensus. We view shares as attractive as we believe issues plaguing Kering’s brands are cyclical (fashion and economic cycle) rather than structural.
Gucci is one of the top three global luxury brands by customer awareness, with a global footprint of over 500 stores and strong margins.
The Gucci brand can fall victim to overexpansion risk and customer fatigue after a period of extremely strong volume growth and industry outperformance pre-covid-19. A recent brand slowdown versus the industry points to this happening.
|
Metric
|
KER
|
RMS
|
MC
|
|---|---|---|---|
Price/Earnings (Normalized) | 13.22 | 53.64 | 25.58 |
Price/Book Value | 2.64 | 16.19 | 6.37 |
Price/Sales | 2.05 | 18.35 | 4.52 |
Price/Cash Flow | 8.95 | 48.06 | 16.94 |
|
Metric
|
KER
|
RMS
|
MC
|
|---|---|---|---|
Quick Ratio | 0.68 | 3.58 | 0.58 |
Current Ratio | 1.38 | 4.40 | 1.32 |
Interest Coverage | 12.44 | 99.32 | 23.09 |
|
Metric
|
KER
|
RMS
|
MC
|
|---|---|---|---|
Return on Assets (Normalized) | 8.33% | 24.29% | 11.43% |
Return on Equity (Normalized) | 20.97% | 33.36% | 27.46% |
Return on Invested Capital (Normalized) | 11.34% | 27.81% | 16.88% |
|
Ticker
|
Name
|
Morningstar Rating for Stocks
|
Capital Allocation
|
Economic Moat
|
Market Cap
|
|---|---|---|---|---|---|
LVMHF
| Lvmh Moet Hennessy Louis Vuitton SE | — | Jbn | $425.5 Bil | |
LVMUY
| Lvmh Moet Hennessy Louis Vuitton SE ADR | Nksswlbh | Ryrj | $424.5 Bil | |
HESAF
| Hermes International SA | — | Bhh | $257.4 Bil | |
HESAY
| Hermes International SA ADR | Yqkvgzxgs | Tcfqf | $257.4 Bil | |
CHDRF
| Christian Dior SE | — | Xdbsf | $143.4 Bil | |
CHDRY
| Christian Dior SE ADR | — | Ssc | $140.4 Bil | |
SWGAY
| The Swatch Group AG ADR | Mzqhcmn | Nddzrt | $11.0 Bil | |
TPR
| Tapestry Inc | Tlmlpmms | Xnlyfb | $9.0 Bil | |
CPRI
| Capri Holdings Ltd | Wrbgvmfw | Jvc | $4.3 Bil | |
REAL
| The RealReal Inc | Ndgd | Xjsky | $356.0 Mil |
