FTSE 100: Index falls as earnings results weigh; pound below $1.33, Bodycote soars
Investing.com - Deutsche Bank (ETR:DBKGn) downgraded Puma SE (ETR:PUM) (OTC:PMMAF) from Buy to Hold on Monday, slashing its price target to EUR20.00 from EUR34.00 following disappointing second-quarter results.
The German sportswear company reported weaker-than-expected second-quarter EBIT and significantly reduced its fiscal year 2025 sales and EBIT guidance. Management did not provide specific EBIT targets for FY2025 and indicated that 2026 would be a transition year.
Deutsche Bank noted that Puma’s lack of earnings visibility makes it a challenging investment case until the company clarifies its strategy, which is expected to be presented in October. Early indications suggest Puma is abandoning its brand elevation strategy in favor of focusing on full-price sales.
The significant slowdown in Puma’s wholesale business suggests the company’s turnaround will take longer than anticipated, though Deutsche Bank views the strategic shift as "the correct direction of travel."
While acknowledging the possibility that management provided an overly conservative outlook, Deutsche Bank observed that the company appeared to have "very limited visibility" on its business performance, which contributed to the decision to downgrade the stock.
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