On Thursday, CLSA raised the price target on Prada (OTC:PRDSY) SpA (1913:HK) (OTC: PRDSY) to HK$68.00, up from the previous HK$67.00, while reiterating an Outperform rating on the stock. The adjustment follows Prada's third-quarter performance, which exceeded market expectations, particularly due to the substantial growth of its Miu Miu brand.
Prada reported an 18% year-over-year constant currency sales increase for the third quarter of 2024, surpassing CLSA's own projections as well as the Visible Alpha consensus of a 13% to 15% rise. This growth stands out among major luxury brands, with Prada achieving a significant lead in the Asia-Pacific region compared to its peers.
The surge in sales is credited largely to the Miu Miu brand, which saw a remarkable 105% year-over-year constant currency increase in retail sales, far above the anticipated 70% to 68%. The Prada brand itself also experienced a steady 2% growth in the same period, positioning it ahead of many other prominent luxury brands.
CLSA maintains a positive outlook on Prada’s potential to continue increasing its market share over the medium term. The firm anticipates a compound annual growth rate (CAGR) of 7% to 10% in sales and net profit for Prada from 2024 through 2026.
In light of these developments, CLSA has opted to raise the price target for Prada shares while maintaining an optimistic view on the company's future performance.
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