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On Tuesday, RBC Capital Markets adjusted its price target for Puma SE (PUM:GR) (OTC: PMMAF (OTC:PMMAF)), reducing it to €25.00 from the previous €26.00, while retaining a Sector Perform rating on the stock. The revision comes as Puma SE faces several challenges, including the potential for additional revenue and earnings revisions in the second half of 2025, and the impending arrival of a new CEO, Arthur Hoeld, slated to join on July 1, 2025. According to InvestingPro data, the stock appears significantly undervalued at current levels, trading at a P/E ratio of 12.3x with a healthy gross profit margin of 47.4%.
The firm’s analyst expressed concerns over the sportswear company’s recent guidance for the first quarter of 2025, noting the narrow margin for error in meeting the already lowered expectations. With the looming threat of US tariffs and the transition in leadership, there is a risk that Puma may withdraw its full-year 2025 guidance as early as when the first-quarter results are released. InvestingPro analysis reveals that while the company maintains strong liquidity with a current ratio of 1.5x, two analysts have recently revised their earnings expectations downward for the upcoming period.
RBC Capital anticipates the possibility of further cuts to consensus expectations for Puma’s revenue and earnings in the latter half of 2025, which are currently considered to be too optimistic. The analyst highlighted the need for more clarity regarding Puma’s strategic direction, which is expected to take several quarters to materialize.
Reflecting these concerns, RBC Capital has revised its estimates, cutting projections by 9% for the full year 2025 and by 5% for the full year 2026. The Sector Perform rating suggests that the analyst views Puma’s stock as likely to perform in line with the average returns of the sector over the next twelve months.
In other recent news, Puma SE has been the focus of several significant analyst updates. Berenberg initiated coverage on Puma with a Buy rating, setting a price target of €40.00. The firm noted Puma’s low enterprise value to sales ratio and highlighted the company’s strengths, including its positioning in key performance sports and strong balance sheet. In contrast, UBS downgraded Puma from Neutral to Sell, reducing the price target to €19.50. UBS cited structural challenges and a need for strategic overhaul as reasons for the downgrade, alongside a predicted modest revenue growth and margin concerns. BNP Paribas (OTC:BNPQY) Exane also downgraded Puma to Neutral, setting a price target of €25.00. This change was due to concerns over Puma’s near-term financial outlook and potential profit declines. These recent developments reflect varied analyst opinions on Puma’s future performance amid current market challenges.
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