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Wednesday, Jefferies adjusted its price target on ANTA Sports Products Ltd. (2020:HK) (OTC: ANPDF) shares, lowering it to HK$95 from the previous HK$108, while maintaining a Hold rating on the stock. The revision comes in the wake of ANTA Sports’ earnings call, which provided a mixed outlook compared to market consensus. According to InvestingPro analysis, ANTA maintains a "GREAT" financial health score, and current valuations suggest the stock may be undervalued.
Analysts at Jefferies noted that despite the mixed financial outlook, they decided to maintain the Hold rating but reduced the price target by 12%. The firm’s decision reflects concerns about the lack of catalysts for the stock and its valuation, which they consider rich in the current market context. However, ANTA’s impressive 63% gross profit margin and 15.9% revenue growth over the last twelve months paint a different picture. InvestingPro subscribers can access 12 additional key insights about ANTA’s financial performance.
The report from Jefferies highlighted ANTA’s strategy for 2025, which aims to ramp up competition across various segments, including urban outdoor, sports fashion, and value-for-money categories. This strategy stands in contrast to the prevailing consensus that competition within the industry would diminish by 2025.
Jefferies’ analysis suggests that ANTA’s aggressive approach may intensify the competitive landscape, challenging other industry players. The firm’s strategies are set to create a more dynamic market environment in the coming years.
In summary, Jefferies’ current stance on ANTA Sports reflects a cautious approach, taking into account both the company’s ambitious plans and the broader industry dynamics. The revised price target of HK$95 represents the firm’s updated valuation of ANTA’s stock in light of these factors.
In other recent news, Bernstein SocGen Group has reinstated coverage of ANTA Sports Products Ltd., assigning a Market Perform rating to the company’s stock. The firm set a price target of HK$90.00, reflecting its analysis of ANTA Sports’ strengths and challenges. Bernstein highlighted the company’s robust portfolio, which includes both local and international sportswear brands. However, the core brands, Anta and Fila, which contribute approximately 85% of the company’s revenue, are experiencing growth challenges. Bernstein noted that while high-growth niche brands like Kolon and Descente are part of ANTA Sports’ offerings, they lack significant scale. The company’s 40% ownership in Amer Sports contributes more to below-the-line metrics rather than top-line growth. Bernstein also pointed out that potential margin gains through operational efficiencies, such as improvements in wholesale discounts and direct-to-consumer operations, remain unproven. The analysis suggests that ANTA Sports’ current valuation appears to already account for the strengths of its diverse portfolio.
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