Deutsche Bank cuts Reply SpA target to EUR185, maintains Buy

Published 13/05/2025, 09:06
Deutsche Bank cuts Reply SpA target to EUR185, maintains Buy

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.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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