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Investing.com - UBS has upgraded Puma SE (ETR:PUM) (OTC:PMMAF) from Sell to Neutral and raised its price target to EUR20.90 from EUR16.30, citing changing market dynamics following news about potential changes to Artemis’s ownership stake. The stock has shown resilience with a 13% gain over the past week, according to InvestingPro data, despite facing a challenging six-month period with an 18% decline.
The upgrade comes after reports that Artemis is exploring options for its 29% stake in the sportswear company, which UBS notes could temporarily shift investor focus away from Puma’s fundamental performance. InvestingPro analysis suggests the company is currently undervalued, though analysts anticipate sales declines in the current year.
UBS highlighted that sentiment toward Puma had been negative prior to the Artemis news, with the stock being "the most crowded short" according to the firm’s crowding data.
The investment bank suggests that speculation about the potential buyer’s intentions for Artemis’s stake "could limit downside risk to the stock," creating a more balanced risk/reward profile.
Despite Puma trading at approximately 0.5x EV/sales and an EV/EBITDA multiple of 9.7x, which appears inexpensive compared to previous transactions involving Reebok or Skechers, UBS cautions that the circumstances for those peers were "materially different," making a significant re-rating unlikely. For deeper insights into Puma’s valuation metrics and additional analysis, visit InvestingPro, which offers exclusive financial health scores and detailed company analysis.
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