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On Wednesday, Exane BNP Paribas (OTC:BNPQY) significantly adjusted its stance on Hugo Boss AG, downgrading the luxury fashion house's stock from Outperform to Underperform. The firm also slashed the price target to €32.00 from the previous €63.00, reflecting a change in expectations for the company's financial performance.
The downgrade follows a profit warning issued by Hugo Boss last week, marking the latest in a string of disappointing news since the fourth quarter of 2023. The analyst indicated that the profit warning was a clear sign that the company is struggling to maintain its revenue and profit margins as previously anticipated.
In response to these challenges, Exane BNP Paribas has revised its earnings per share estimates for Hugo Boss for the years 2024 to 2026, reducing them by approximately 30%. This revision takes into account the "new reality" faced by Hugo Boss, as the firm anticipates further potential declines in the company's financial guidance for fiscal years 2024 and 2025.
The downgraded outlook suggests that the market should temper expectations for Hugo Boss's ability to navigate the current economic pressures. With the reduced price target and earnings estimates, investors are now provided with a recalibrated perspective on the company's value and future performance.
Hugo Boss AG, listed on the Frankfurt Stock Exchange as BOSS:GR and over-the-counter as BOSSY, will now be under closer scrutiny by investors as they assess the impact of the revised guidance and Exane BNP Paribas's outlook on their investment decisions.
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