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On Tuesday, Deutsche Bank (ETR:DBKGn) analyst Jasmine Rand revised the price target for Reply SpA (REY:IM) to €185.00, a decrease from the previous €190.00, while continuing to recommend a Buy rating for the stock. The adjustment follows Reply’s first-quarter revenue report for 2025, which showed figures marginally below market expectations.
Reply SpA reported Q1’25 revenues of €603.4 million, which, though representing a year-over-year increase of 8.9%, fell short of the consensus estimate of 10.5% growth. Organic currency-neutral growth was recorded at 5.3%. Region 1, which includes markets such as Italy and the US, was a significant contributor to this growth, reporting an 8.5% increase year-over-year to €383 million, closely aligned with the like-for-like (LFL) figure of 8.1%.
Conversely, Region 2, which includes Germany among others, experienced a more pronounced deceleration in growth. The LFL growth rate in Q1 was just 3%, a reduction from the 10.8% and 6.2% seen in the third and fourth quarters of 2024, respectively. This slowdown was attributed to challenges in sectors such as Automotive & Manufacturing and Retail & Consumer Packaged Goods (CPG), which are more prevalent in Region 2 and have been impacted by tariff policies.
In Region 2, Retail & CPG accounts for approximately 15% of revenue, which has decreased to around 8%, compared to 11.5% across the group. The Automotive & Manufacturing sector represents about 30% of Region 2’s revenues, a figure that stands in contrast to approximately 17% in Region 1 and 6% in Region 3.
Despite the slower growth in certain areas, Reply’s management is optimistic about the potential for improvement in Region 2, especially following the completed integration of Fincon, a strategic move that could bolster the company’s performance in the forthcoming periods.
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