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On Tuesday, shares of Prada (OTC:PRDSY) SpA (1913:HK) (OTC: PRDSY) remained the focus after Jefferies reiterated its Buy rating and price target of HK$79.00. The firm’s analysts highlighted Prada’s resilience in navigating a challenging environment for businesses not primarily targeting ultra-high-net-worth individuals (UHNWIs), noting positive like-for-like sales (LFLs). According to InvestingPro data, the company’s impressive 80.16% gross profit margin and 11.27% revenue growth in the last twelve months support this positive outlook.
The analysts at Jefferies pointed out the exceptional performance of the Miu Miu brand, which continues to deliver impressive gains. They credited the hard work being put into establishing a foundation for sustainable growth for the brand. Despite the positive results, the company did not provide any details regarding mergers and acquisitions (M&A).
The conference call with Prada supported the view that market-standard consensus upgrades are likely, even as the industry faces a mixed backdrop. Jefferies’ stance on Prada remains optimistic, as the luxury fashion company demonstrates its capacity to maintain growth amidst varying market conditions. With an overall Financial Health score rated as "GREAT" by InvestingPro, and comprehensive analysis available in the Pro Research Report, investors can gain deeper insights into Prada’s market position and growth potential.
Prada’s ability to drive positive LFLs, particularly in a segment not heavily reliant on UHNWIs, is a testament to its brand strength and strategic management. This performance, coupled with the success of Miu Miu, indicates the company’s potential for continued progress in the luxury goods market.
Investors and industry observers will be keeping a close watch on Prada’s stock as the market reacts to Jefferies’ reiterated confidence in the company’s financial health and growth prospects. The lack of M&A details suggests a focus on organic growth and operational excellence as the company navigates the current industry landscape.
In other recent news, Prada SpA is reportedly considering a bid to acquire Versace from Capri Holdings (NYSE:CPRI) Ltd. This potential acquisition follows a comprehensive review of Versace’s financial and sales data, although it is not guaranteed that a formal offer will be made. In addition to this potential merger, Goldman Sachs upgraded its rating for Prada from "Neutral" to "Buy," raising its price target from HK$64.00 to HK$68.50. The upgrade is based on Prada’s potential for market share gains and successful retail strategies, particularly through its Miu Miu brand, which has shown strong sales growth. Miu Miu, making up 24% of Prada’s retail sales for the fiscal year 2024, has been a standout performer with significant growth potential in new retail spaces. The larger Prada brand, accounting for 74% of retail sales, has also outperformed peers, attracting younger customers and expanding its retail presence. Prada’s management confirmed that both brands have experienced consistent sales growth over the past few years. The company’s growth strategy for 2025 includes opening new stores and enlarging existing ones to maintain this momentum.
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