UBS cuts Hugo Boss stock rating, lowers price target to EUR38.00

On Friday, UBS analyst team downgraded Hugo Boss (ETR:BOSSn) AG (BOSS:GR) (OTC: BOSSY) stock from Buy to Neutral, adjusting the price target to EUR38.00 from the previous EUR49.00. The downgrade was prompted by changes in consumer confidence and the macroeconomic landscape, which have shifted since the initial Buy rating was given.

The UBS analysts had based their earlier Buy rating on early indications of rising consumer confidence, particularly in regions where Hugo Boss has significant market exposure. The company’s relatively small presence in China, accounting for only 6% of sales, and strong positions in the improving markets of the United States and Europe, with 15% and 63% of sales respectively, were seen as advantageous.

Despite Hugo Boss’s fourth-quarter performance in 2024 exceeding expectations with a 6% increase compared to the consensus prediction of 2%, recent developments suggest that the positive momentum has not continued into 2025. UBS now anticipates that the fashion industry will face renewed challenges that could impact Hugo Boss’s performance.

Nonetheless, the analysts at UBS acknowledge the management’s ability to implement efficiencies and cost savings, which could help mitigate some operational expenses. However, they also note that their earnings per share (EPS) estimates for Hugo Boss for the years 2025, 2026, and 2027 have been reduced by 5%, 13%, and 15%, respectively.

In light of these factors, UBS believes that the price-to-earnings (P/E) multiple for Hugo Boss is unlikely to rise beyond its current low level. This assessment has led to the decision to downgrade the stock rating to Neutral and reduce the price target, reflecting a more cautious outlook for the company’s stock valuation.

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